Visa, Mastercard can likely handle swipe-fee settlement bigger than $30 billion: judge

Core Insights - A federal judge indicated that Visa and Mastercard could likely handle a settlement greater than the rejected $30 billion proposal, which aimed to reduce swipe fees for merchants [1][2] - The judge criticized the proposed settlement for offering only $6 billion in annual savings to merchants, which is minimal compared to the estimated $100 billion in fees paid in 2023 [1] Group 1: Legal Proceedings - The antitrust litigation regarding swipe fees has been ongoing since 2005 and may proceed to trial if Visa and Mastercard cannot reach a new settlement with merchants [2] - The judge's opinion suggests that while there is no definitive evidence of Visa's and Mastercard's profitability, the evidence implies they could withstand a larger judgment [2] Group 2: Company Responses - Visa expressed disappointment with the judge's decision but emphasized the importance of direct resolution with merchants and maintaining a secure and innovative payment ecosystem [3] - Mastercard also expressed disappointment, stating that the rejected settlement would have fostered competition and provided significant value to businesses managing card acceptance [4] Group 3: Settlement Details - The rejected settlement proposed a reduction of swipe fees by 0.04 percentage points for three years, capped fees for five years, and allowed merchants more flexibility in imposing surcharges [4] - The judge noted that the proposed changes did not represent the best possible recovery for merchants, as they would still face high fees and the "Honor All Cards" rule [5] Group 4: Merchant Reactions - Many merchants and trade groups, including the National Retail Federation, opposed the settlement, indicating widespread dissatisfaction with the proposed terms [6]