Sou Hu Cai Jing·2025-11-13 10:47Core Viewpoint - Visa and Mastercard, dominant players in the payment processing industry, have agreed to reduce credit card transaction fees by an average of 0.1 percentage points over the next five years, which has been met with skepticism from retailers who view this as insufficient [1][6][12]. Group 1: Background and Context - The agreement to lower transaction fees follows a lengthy negotiation process that lasted nearly 20 years, culminating in a $30 billion settlement proposal that initially aimed for a 0.07 percentage point reduction [3][6]. - A federal judge rejected the initial settlement, stating that the concessions were inadequate, which prompted the payment giants to revise their offer [3][6]. Group 2: Industry Dynamics - Credit card transaction fees in the U.S. are significantly higher than in the EU, averaging around 2%, which is more than double the EU's capped rate of 0.3% [5]. - The distribution of transaction fee profits heavily favors the card issuers, with issuers taking 70%, card networks 20%, and acquirers only 10%, leaving merchants with minimal profit [5]. Group 3: Merchant Perspectives - Merchants have long been burdened by high transaction fees, with small businesses often seeing these fees consume a substantial portion of their profits, sometimes up to half [14]. - The new agreement allows merchants to choose whether to accept only standard cards to save on costs or to accept premium cards to attract high-end customers, providing them with more control [10][12]. Group 4: Future Implications - Despite the reduction, many merchants remain dissatisfied, arguing that the 0.1% decrease does not adequately address the high fees they face, especially for small businesses [12][14]. - The new agreement is not yet finalized and requires approval from the federal court, raising concerns that payment giants may find ways to offset the reductions through other fees [14][16]. - The ongoing struggle between payment giants and merchants highlights a shift in power dynamics, with recent judicial actions challenging the previously unassailable position of these corporations [16].