Visa Mastercard Settlement Update: June 2026

The revised Visa and Mastercard settlement just cleared its first major court hurdle. Here’s what’s happening:

• A federal judge granted preliminary approval of the revised $38 billion settlement.
• If finalized, the deal would reduce average US credit interchange rates by 10 basis points for five years.
• It would also create more flexibility around surcharging, card acceptance, and merchant negotiation rights. 

Beyond the headlines, let’s dive a bit deeper so you can fully understand what’s going on here.

While the settlement may lower certain card acceptance costs at the interchange level, it doesn’t automatically mean that every merchant will see a lower effective rate. 

Quick Overview of the June 2026 Settlement Update

On June 9, 2026, US District Judge Brian Cogan granted preliminary approval to the revised Visa and Mastercard Settlement. 

This is a meaningful update because prior versions of the settlement have been rejected. And the revised proposal (announced in November 2025) is now moving further through the court process.

But preliminary approval is not the same thing as final approval. 

Simply put, it’s not a done deal. There can still be objections, procedural delays, appeals, and additional court reviews before any rate changes or rule changes go into effect. 

So merchants following along should treat this update purely as an informational or planning window. Don’t expect an immediate cost reduction on your credit card processing fees just yet. 

What the Settlement Would Change If Finalized

The current settlement proposal that was preliminarily approved includes several major changes:

• 10 basis point reduction in the average effective US credit interchange rate for 5 years.
• 1.25% cap on standard US consumer credit card interchange rates.
• More flexibility around credit card surcharging.
• Changes to “honor all cards” policies.
• More room for merchants to make acceptance decisions based on broader card categories.
• New merchant education requirements around payment acceptance and processing costs.

That sounds significant, and in some ways it is. But the impact will vary significantly for each merchant. So not everyone will benefit equally or see a cost reduction at all.

Why the Headline Savings May Be Smaller Than Merchants Expect

The biggest cost-savings benefit being discussed right now is the 10-basis-point reduction for five years. I’ve already seen industry professionals telling merchants to run quick math to estimate savings (Ex: $1M in monthly volume = $1k saved per month and $12k saved annually).

But it’s not so simple.

The settlement language doesn’t necessarily mean that every Visa and Mastercard credit card transaction becomes 0.10% cheaper. Instead, the settlement refers to a reduction in the average effective credit interchange. 

This means that the actual reduction can vary by card type, industry, transaction category, and ultimately, how Visa and Mastercard decide to apply the changes internally. 

For example, Visa may decide to reduce Utility and Fuel categories by 0.20% and decide that certain Restaurant and Retail categories only get a 0.05% reduction. Mastercard could adjust those same categories by 0.15% and 0.03%, respectively. 

Certain industries, transaction environments, and card types may not see savings at all. We won’t know the specifics until the settlement is finalized and the new interchange rates are published. 

But I can’t see a scenario where Visa and Mastercard drastically slash rates on their most profitable categories. 

The 1.25% Cap Also Needs Context

Additionally, the 1.25% cap mentioned in the settlement does NOT mean that this is the maximum allowable interchange rate that Visa and Mastercard can assess on credit card transactions.

It only applies to standard US consumer credit cards. Not every transaction.

In practice, only a small portion of your credit mix may qualify for the 1.25% rate cap. And all of the premium rewards cards, commercial cards, and other high-cost credit products that you accept will continue to be more expensive (in some cases could be over double this rate cap).

This is another reason why broad savings estimates put out by industry professionals can be very misleading. 

The reality is that only some businesses will see significant savings from this term, while others will be disproportionately unaffected.  

This is Not the Same as the Older Visa Mastercard Cash Settlement

I also want to quickly clarify that there is no cash payout to merchants as part of this settlement. This is confusing because there are actually multiple Visa and Mastercard settlements happening at the same time.

An older Visa/Mastercard settlement included a cash fund for merchants that accepted Visa and Mastercard between January 2004 and January 2019, with a $5.5 billion class action claim. But the deadline to file has already passed. 

This newer lawsuit that’s making headlines here in June 2026 is an entirely different settlement. The $38 billion figure being used here is not a fund for cash payouts, but rather represents cumulative merchant savings on interchange rates over a five year period. 

It’s important to understand this distinction because a lot of merchants hear “Visa Mastercard settlement” and assume they’re either getting paid or need to file a claim immediately.

Neither is true for this new settlement. 

Instead, this update is about what your future cost of accepting Visa and Mastercard credit cards could look like if the settlement gets final approval, and whether those savings will actually reach your merchant account. 

Will Savings Actually Reach Your Statement?

Even if interchange rates get lowered after final approval, merchants are not billed directly by Visa or Mastercard. Your processor, PayFac, or software provider sits between you and the card networks.

So whether you actually see savings depends on how your account gets priced, how transparent your statement is, and whether your provider actually passes the lower underlying costs through to you.

Two businesses with similar sales volume could have very different outcomes from the same settlements.

Merchants Most Likely to See Savings

These businesses are in the best position to save money on credit card processing as a result of these new settlement terms. If you’re:

• On interchange-plus pricing.
• Getting detailed monthly statements with individual category breakdowns.
• Accepting a high percentage of standard US consumer credit cards.
• Already tracking your effective rate, card mix, and processor markup.
• Processing transactions properly in a way that doesn’t get them downgraded. 

While this still doesn’t guarantee savings, these merchants will at least have the visibility to confirm whether settlement-related reductions are reaching their accounts.

Merchants Unlikely to Benefit

Conversely, other businesses probably won’t see a significant change to their processing costs. This applies to:

• Flat-rate pricing models, where you pay the same rate regardless of the underlying interchange cost.
• Tiered pricing structures (transactions grouped into qualified, mid-qualified, and non-qualified buckets).
• Opaque or bundled pricing that doesn’t clearly separate interchange from processor markups.
• Merchants processing via PayFac platforms, software-integrated payment systems, or all-in-one POS providers.
• Businesses that accept a high-volume of debit cards, prepaid cards, commercial cards, or premium rewards cards.

In these situations, a lower interchange rate just translates to extra margin for your processor. It’s highly unlikely that they’ll decide to slash your rates and pass those savings onto you (unless you proactively do something about it).

What Merchants Should Do Right Now to Prepare

For now, merchants should treat this as a planning period. The settlement isn’t final, rule changes aren’t active yet, and no new interchange rates have been published.

But that doesn’t mean you should do nothing. There’s definitely an opportunity to save money here, especially if you take steps to understand your current processing setup and optimize accordingly.

Here’s where to start.

• Review your current pricing model. If you’re on a flat-rate or tiered plan, switch to interchange-plus (you don’t have to change processors).
• Assess card mix to identify what percentage of standard US consumer credit cards will benefit from the 1.25% cap.
• Check whether interchange categories are clearly listed on your statements, and ask your processor to give you more detailed breakdowns if they aren’t.
• Don’t rush into surcharging or card acceptance changes just yet.
• Establish a baseline now by calculating your effective rate.

The biggest mistake you can make is waiting until after the settlement gets finalized to start asking those questions. By then, you may not know what’s changed or whether your processor is quietly keeping the benefit.

And putting the settlement aside, you can always negotiate better terms with your processor to get savings. I strongly suggest doing this sooner than later, as it could potentially be a two-fold savings at both the processor level and interchange level.

If you need help with any of this, just reach out for a free audit from my team here at MCC. We’ll let you know where you stand, whether you’re likely to see any savings from the settlement, and if there are other ways for you to reduce processing costs.