Visa and Mastercard near deal to ease swipe fees, give merchants more flexibility

US payment giants Visa and Mastercard are reportedly close to striking a settlement with retailers that could lower the cost of credit card transactions and give shops more control over which cards they accept.

According to sources cited by the Wall Street Journal, the companies plan to reduce interchange fees, which merchants pay each time a customer uses a credit card. Currently averaging between 2 and 2.5 percent per transaction, these fees could fall by roughly a tenth of a percentage point over several years.

In addition, Visa and Mastercard are expected to relax rules that force merchants to accept all cards within their networks once they agree to take one. Under the proposed settlement, card acceptance may be divided into categories such as rewards cards, no-rewards cards, and commercial cards.

The move is aimed at resolving a legal battle that stretches back to 2005. Last year, both companies agreed to a separate settlement worth an estimated $30 billion, which included minor reductions in swipe fees and limits on fee increases.

Merchants have long argued that high swipe fees and restrictions on steering customers toward cheaper payment methods have unfairly raised their costs. The proposed settlement would also address surcharging, allowing retailers more flexibility in passing costs on to customers if they choose.

Visa and Mastercard have denied any wrongdoing in agreeing to the settlements. Both declined to comment when approached for confirmation of the latest talks.

If finalised, the agreement could reshape how businesses handle credit card payments and potentially ease pressure on retailers struggling with rising costs.