Visa (NYSE: V) has reached a landmark settlement with U.S. merchants, with more than 90% of them being small businesses, after nearly 20 years of litigation. The agreement includes significant changes that will directly impact businesses, including a reduction in credit interchange rates and guaranteed rate caps until 2030. The settlement also offers merchants new ways to manage costs, such as steering to preferred payment methods and more flexibility around surcharging.
The key highlights of the agreement are as follows: The settlement will result in reduced credit interchange rates for U.S. merchants, predominantly consisting of small businesses. It guarantees that the reduced credit interchange rates will be capped for five years, providing an unprecedented level of cost certainty for merchants. Merchants will have greater flexibility at the point-of-sale, including the opportunity to steer to preferred payment methods and more optionality around surcharging. The agreement also provides funding for new programs to educate small businesses about payment acceptance options and how to best manage costs.
Kim Lawrence, President, North America, Visa, emphasized the importance of addressing the pain points identified by small businesses while maintaining safety, security, innovation, protections, rewards, and access to credit.
The settlement resolves claims against Visa, Mastercard, and other defendants brought by the injunctive relief class in the lawsuit entitled "In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation" and is subject to court approval.
Visa (NYSE: V) is a global leader in digital payments, operating in over 200 countries and territories. The company's mission is to connect the world through innovative, reliable, and secure payments, enabling individuals, businesses, and economies to thrive. This landmark settlement is poised to have a tangible impact on small businesses, providing them with greater cost certainty and flexibility in managing payment acceptance options. Following these announcements, the company's shares moved 0.4%, and are now trading at a price of $282.25. For the full picture, make sure to review Visa's 8-K report.
