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In one of the largest antitrust resolutions in U.S. history, Visa and Mastercard reached a $200 billion settlement Monday with millions of merchants, ending a 20-year legal clash over credit card fees that reshaped how businesses handle customer payments.

The sweeping agreement, filed in a New York federal court, follows years of court rebukes and broken negotiations. The deal will grant merchants greater freedom over what cards they accept, slash transaction fees, and impose a five-year cap on rates — all reforms aimed at satisfying U.S. District Judge Margo Brodie, who previously ruled that earlier proposals didn’t go far enough.

“The amended settlement remedies each of those concerns and indeed provides reforms far beyond those the court discussed,” the merchants wrote in their filing seeking preliminary approval.

Experts estimate the deal could save merchants more than $200 billion over the settlement’s lifetime — a staggering figure for an industry that has long accused the payment giants of stifling competition and forcing businesses into high-fee structures.

Merchants Finally Win Power Over Card Acceptance

The dispute stretches back to 2005, when small businesses and major retailers alike sued Visa, Mastercard, and several banks, alleging that “Honor-All-Cards” rules forced them to accept every card in a network, including those with premium rates. The rules, plaintiffs argued, eliminated choice and inflated costs for both merchants and consumers.

The newly amended agreement dismantles those barriers. Merchants can now refuse high-cost premium or commercial credit cards and impose surcharges up to 3%, regardless of whether they also accept American Express or other competitors.

It also enforces direct rate reductions for all merchants — those who pay standard posted rates as well as those with negotiated terms — addressing a major criticism from Judge Brodie, who previously said the old deal offered only “limited relief.”

Visa and Mastercard Tout the Deal as ‘Historic’

In their own filings, Visa and Mastercard urged the court to approve what they called a “historic reform package,” saying it strikes a fair balance between merchant relief and business stability.

“The settlement treats class members equitably and provides tangible relief to all merchants,” Visa said, adding that further concessions would threaten the networks’ ability to function.

The credit card networks acknowledged that average interchange fees will drop by 10 basis points, with a five-year freeze at current levels and a 125-basis-point cap on standard consumer credit cards.

Mastercard noted that the settlement will allow merchants to differentiate between consumer and commercial cards but not discriminate between banks issuing cards at the same tier.

“The agreement enables merchants to make decisions independently on accepting consumer credit and commercial credit cards,” Mastercard said in an investor filing.