The cost of accepting credit cards has become one of the fastest-growing expenses facing American businesses, and a judge's approval of a revised $38 billion Visa and Mastercard settlement is unlikely to end the fight. For retailers already dealing with cautious consumers, higher operating expenses and tighter margins, the battle over swipe fees highlights a financial burden that continues to spread through the economy.
A U.S. judge on Tuesday granted preliminary approval to the agreement, bringing a legal battle that began more than two decades ago a step closer to resolution. Merchants accused Visa and Mastercard of using their market power to keep interchange fees — commonly known as swipe fees — artificially high, forcing retailers to absorb rising payment charges or pass them on to customers.
The timing matters because many businesses entered 2026 hoping some of the financial strain weighing on profits would begin to ease. Instead, companies continue to face a growing list of unavoidable expenses, from wages and insurance to financing costs and digital payment charges. The settlement may reduce some of those burdens, but many retailers argue it does not fundamentally change the economics of a payment system that has become increasingly expensive to participate in.
According to figures cited by merchant groups, Visa and Mastercard swipe fees reached $118.8 billion in the United States during 2025, up from $111.2 billion in 2024 and just $25.6 billion in 2009. The average fee reached 2.36%, a level many merchants say is difficult to absorb at a time when consumers are becoming more selective about where and how they spend money.
Under the settlement, Visa and Mastercard would reduce swipe fees by 0.1 percentage point for five years, while standard consumer card rates would be capped at no more than 1.25% for eight years. Merchants would also gain greater flexibility over which categories of cards they accept and more freedom to impose surcharges in certain circumstances.
Supporters argue those changes could be meaningful. Economists Joseph Stiglitz and Keith Leffler estimated that the agreement could save merchants $38 billion by 2031 and generate broader economic benefits worth more than $224 billion. They also point to changes that weaken the long-standing "Honor All Cards" requirement, which historically forced merchants to accept all cards within a network.
Many of the country's largest retailers remain unconvinced. The National Retail Federation, the Merchants Payments Coalition and other trade groups opposed the settlement, arguing that merchants will still face difficult choices when customers use premium rewards cards that carry higher acceptance fees. Walmart went further, calling the agreement a gift to Visa and Mastercard because it allows business practices that retailers have challenged for years to remain largely intact.
Small business owners often describe card fees as one of the few expenses they cannot easily control. Unlike staffing levels, inventory purchases or expansion plans, accepting card payments is no longer optional for most merchants. Consumers increasingly expect to pay digitally, leaving retailers with little room to avoid the charges attached to those transactions. When those expenses rise, owners often look elsewhere for savings, delaying hiring plans, scaling back investment or quietly increasing prices.
The case also exposes an awkward reality for many households. Millions of consumers have become more dependent on cashback rewards, travel points and other credit-card perks as they look for ways to stretch their budgets. Yet those benefits are largely funded through the same interchange fees that merchants say are eroding profitability. The result is a system where both shoppers and businesses feel squeezed, even as card usage continues to grow.
Consumers may never see swipe fees listed separately on a receipt, but the debate over who ultimately pays them is becoming harder to ignore. As retailers work to protect margins and households remain careful about spending, the fight over payment costs is unlikely to stay confined to courtrooms and boardrooms. It is likely to keep showing up in places most shoppers never notice, from the prices on shelves to the decisions businesses make about hiring, expansion and investment.
