Thursday, October 16, 2025
Visa, Mastercard to pay merchants $199.5 million to settle antitrust suit
Visa and Mastercard agreed to pay, combined, nearly $200 million to settle a class-action lawsuit brought by merchants in 2016 involving the liability shift accompanying implementation of EMV chip cards and readers.
The liability shift made merchants that failed to install and use EMV card readers at their points of sale responsible for chargebacks resulting from card transactions they submitted for processing. Previously, banks would typically eat the cost of chargebacks.
Alleged antitrust violation
The lawsuit was filed by a group of supermarkets and a liquor store. The class was never formally identified, although the settlement agreement stated that notices were sent to "approximately" 1 million merchants. The merchants that filed the lawsuit on behalf of the "class" alleged that the two card giants, along with American Express and Discover, violated antitrust laws by coordinating the rule changes in lockstep. Merchants argued that the change saddled them with additional costs without any reductions in transaction fees.
Both Visa and Mastercard denied any wrongdoing in agreeing to settle the lawsuit. But Visa agreed to pay $119.7 million into a common fund set up on behalf of affected merchants; Mastercard agreed to pay $79.8 million into the fund. Resolution was reached "only after five mediations," the settlement agreement noted.
AmEx and Discover had previously settled the claims against them—also without admitting any wrongdoing—and paid $32.2 million into the common fund.
"Combined, this results in a total common fund of $231.7 million," the settlement agreement noted.
Not yet final
This is not a done deal, however. The agreement still needs to be approved by members of the class of merchants represented in the case as well as the U.S. District Court for the Eastern District of New York.
In a document filed with the court, lawyers described the settlement as "an excellent outcome for the class that appropriately weighs the potential rewards of further litigation against Visa and Mastercard with the risks and costs of taking the case further."
While Mastercard and Visa denied the claims leveled at them, they "agreed to enter into [the settlement] to avoid further risk, expense, inconvenience, and distraction of burdensome and protracted litigation," the settlement agreement stated.
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