Visa and Mastercard have agreed to pay a combined $199.5 million to settle a long-running class action filed by U.S. merchants who claimed the companies unfairly shifted the cost of fraudulent transactions onto businesses.
According to Reuters, the proposed settlement, filed Friday in federal court in Brooklyn, requires approval from Chief U.S. District Judge Margo Brodie. The agreement marks the latest chapter in a dispute that began in 2016, when merchants accused the card networks of violating antitrust laws by coordinating rule changes on chargebacks.
Those rules made businesses responsible for fraud-related losses if they had not upgraded their point-of-sale systems to accept chip-enabled cards, effectively forcing merchants to bear greater costs without lowering transaction fees.
Settlement details and company responses
Under the terms of the deal, Visa will pay $119.7 million, while Mastercard will pay $79.8 million. Two other defendants, Discover and American Express, had already settled for a combined $32.2 million earlier this year.
All four companies denied wrongdoing. In a statement, Mastercard said it welcomed the resolution and reiterated its commitment to using advanced technology “to protect Mastercard purchases at every step.” Visa and attorneys for the merchants did not immediately respond to requests for comment.
According to court filings, plaintiffs’ lawyers described the settlement as “an excellent outcome,” noting that it represents about 13% of the merchants’ estimated damages and more than half of a conservative benchmark calculated by experts for Visa and Mastercard.
Broader legal context
The agreement is separate from a $5 billion settlement reached in 2019, when Visa and Mastercard resolved other merchant claims related to credit and debit card fee practices.
The latest case, B&R Supermarket Inc. et al. v. Visa Inc. et al., is being heard in the U.S. District Court for the Eastern District of New York (No. 1:17-cv-02738-MKB-JAM).
