Nearly 1,000 businesses and trade associations have told a federal judge to throw out the proposed Visa and Mastercard swipe fee settlement, calling it a bad deal that would lock in high fees and strip merchants of future legal rights. The objection letter, coordinated by the Merchants Payments Coalition, was filed with U.S. District Judge Brian Cogan in Brooklyn, New York, on September 14, 2026.
The numbers tell the story of why merchants are fighting this hard. Credit and debit card swipe fees hit a record $198.25 billion in 2025, up from $187.2 billion the year before and roughly 80% higher than before the pandemic. For most small businesses, these fees are the single biggest operating cost after labor.
What the settlement actually offers
The deal, which received preliminary approval from Judge Cogan on June 9, 2026, would reduce average credit card interchange rates by about 0.1 percentage point for five years and cap standard consumer card interchange at 1.25% for eight years. It would also loosen the “honor all cards” rule, letting merchants decline certain premium and commercial credit cards that carry fees as high as 4%.
On paper, the settlement is valued at roughly $38 billion in projected savings across about 12 million merchants. In practice, for a small business processing $50,000 a month in credit card sales, the interchange reduction works out to about $50 per month, or $600 per year.
Why merchants say the deal is worse than it looks
Opponents argue the fee reductions are temporary and tiny compared to the scale of the problem. Doug Kantor, general counsel for the National Association of Convenience Stores and an MPC executive committee member, has called the proposed reduction “a mirage” that barely exceeds one year’s worth of fee increases.
The settlement also only applies to the card-issuing banks’ share of swipe fees. It does nothing to limit the portion that goes directly to Visa and Mastercard, which objectors say could wipe out the reductions entirely. And once the caps expire, the networks could raise rates right back.
Perhaps the biggest concern for small businesses is what they would give up. The deal includes broad legal releases that would severely limit merchants’ ability to challenge credit card fee practices in future lawsuits. At an April 28 hearing, attorney Debra Greenberger, representing the National Retail Federation and Retail Industry Leaders Association, told the court that merchants “would rather take the case to trial and risk losing” than accept these terms.
Small business owners who accept Visa and Mastercard should know they are likely part of this class action whether they signed up or not. If Judge Cogan grants final approval, the settlement’s fee caps and legal waivers would bind roughly 12 million merchants nationwide. Business owners concerned about the deal can engage through trade associations that are filing objections or consult legal counsel about their options.
The case now moves toward a final approval hearing, where Cogan will weigh the flood of objections against the settlement’s terms. The National Association of Convenience Stores has already said it will appeal to the Second Circuit if approval is granted. With Congress also weighing the Credit Card Competition Act and President Trump calling for action on swipe fees, the fight over what merchants pay every time a customer taps a card is far from settled.
