Visa and Mastercard Settlement Could Meen Surcharges or Limited Acceptance for Rewards Cards
A proposed settlement between Visa, Mastercard, and a class of merchants could lead to some businesses refusing certain premium credit cards or adding surcharges to transactions, potentially impacting consumers’ rewards-earning strategies. While no immediate changes are expected, the agreement allows merchants greater freedom to dictate which cards they accept and how much they charge for processing them.
For years, merchants have argued that credit card swipe fees are too high, cutting into their profits. This settlement aims to address those concerns by removing restrictions that previously prevented them from surcharging customers for using premium cards - typically those offering the richest rewards. American Express is not part of this settlement and is not expected to be affected.
Currently, merchants are generally prohibited from adding surcharges based on the type of card used. If approved, the settlement would lift those restrictions, giving individual businesses the power to decide whether to accept all cards, refuse certain cards, or impose a fee on transactions made with specific cards.
The obligation for implementing any changes will fall to the merchants.Consumers could encounter checkout messages indicating a particular Visa or Mastercard isn’t accepted, or that using it incurs an extra fee, especially at smaller businesses operating with tight margins. Customers retain the option to shop elsewhere if a merchant declines their preferred card or adds a surcharge.
The timeline for implementation remains uncertain. The settlement requires judicial review and approval, and even after that, it could take months – or longer – for new acceptance or pricing rules to take effect.
For now, your rewards cards and loyalty programs will continue to function as they do today. The Points Guy will continue to monitor the court process and provide updates as the situation develops.
