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On March 26, a proposed settlement agreement was announced requiring Visa and Mastercard to reduce swipe fees charged to restaurants and other merchants to process credit card transactions starting in April 2025.

While this news is welcome, it merely provides temporary relief while allowing credit card companies to raise rates in the future. The bottom line is that these proposed reductions are within the range that Visa and Mastercard have raised swipe fees over the last few years, which rose from an average of 2.02% in 2010 to 2.26% in 2023.

​The banks and networks will argue that the settlement obviates the need for the Credit Card Competition Act (S. 1838/H.R. 3881), but the CCCA remains as the best solution to bring about the long-term, systemic reform required to fix the broken credit card processing market.
Go deeper: The settlement creates three separate “brakes” on swipe fees through rollbacks or fee caps that are worth an estimated $29.79 billion in unrealized savings for businesses and consumers over the next five years:

1. Visa and Mastercard will roll back the posted swipe fee of every merchant by at least four basis points for at least three years.
2. For a period of five years, Visa and Mastercard will not raise the swipe fees of any merchant above the posted rates that existed as of December 31, 2023.
3. For a period of five years, the average effective systemwide swipe fee for Visa and Mastercard must be at least seven basis points below the current average rate of 2.26%.