I’ve seen several posts on this on LinkedIn , Facebook groups already in the last couple of days, and I admit after reading this my brain felt like a squirrel trying to do calculus.
It’s a massive SEC filing, and it’s dense. But after digging i, (also letting an attorney friend read and explain it to me) I realized this isn’t just noise—it’s a seismic shock to our industry, and it’s almost entirely in the merchant’s favor.
We all know the common objections. “Rates only ever go up.” “I’m tired of complex rules.” “I feel like I have no control.”
Well, this settlement gives you a direct answer to every single one of them. It’s a powerful new story for you to tell.
So, How Did We Get Here? (The Backstory)
This didn’t just happen overnight. This is the result of a legal battle that has been raging for decades.
- The Fight Started in 2005: The first class-action complaint was filed way back on June 22, 2005.
- It Became a Massive Lawsuit: That case was eventually consolidated with several others into a giant case in New York, which you’ve probably heard of: In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.
- There Was an Earlier Settlement: You might even remember a big settlement that was reached back in 2012. However, that one was thrown out by an appeals court in 2016, and the fight started all over again.
- This Is the “Rules” Part: This specific settlement is the result of years of negotiations, mediations, and the prospect of even more litigation. It specifically settles the merchants’ claims for “injunctive relief”—which is just a fancy legal term for changing the rules of card acceptance, rather than just getting a cash payout.
Now, after all that fighting, here’s what the merchants finally won.
What’s in the Settlement? (The “What”)
This SEC filing outlines a massive class-action settlement between Visa/Mastercard and a class of merchants. While it’s not final until the court approves it (which the document expects in late 2026 or early 2027), these are the changes coming to our industry:
- Interchange Rate Reduction: You read that right. The networks have agreed to a 10 basis point (0.10%) reduction in the average systemwide effective interchange rate on U.S.-issued consumer and commercial credit transactions.
- A Five-Year Rate Cap: That interchange reduction will be locked in and serve as a cap for five years.
- Simplified Surcharging: The complex, scary rules around surcharging are being replaced with a “simplified approach” that gives merchants “more optionality”. This includes the ability to surcharge at either the “Brand Level” (e.g., all Visa cards) or the “Product Level” (e.g., just Visa Signature cards).
- More Acceptance Flexibility: The old “Honor All Cards” rule is being relaxed. Merchants will get new flexibility to independently choose whether to accept consumer credit vs. commercial credit cards, and even “standard” vs. “premium” rewards consumer cards.
How This Benefits Our Merchants
This is the “what’s in it for me” that our clients want to know. This settlement hands them direct, tangible value. (If, and when it happens)
- Direct, Hard-Dollar Savings: The 10-basis-point drop is a direct reduction in their underlying cost, straight from the card brands themselves.
- Unprecedented Predictability: The 5-year rate cap is huge. For the first time, merchants can actually budget for their processing costs without fearing the constant, creeping interchange hikes from Visa and Mastercard. I’m sure ISO’s will find creative ways to get this money back.
- Surcharging/ Dual pricing is No Longer a Headache: For every merchant who has been too intimidated to start a surcharge/ dual pricing program, this is your opener. “The rules are about to get much simpler, allowing you to easily offset your processing costs. Let me show you how to prepare for it.” I know it sounds much the same as we say now but If it works Don’t try and fix it.
- They Finally Get Control: While most merchants have no clue they pay more for commercial or rewards card they are no longer forced to accept a high-cost commercial or premium rewards card just to accept a regular card. They get to decide if that high-cost card is worth the sale.
How This Affects You and me.
This is where we shine. These changes move us from being “rate sellers” to “expert consultants,” which is exactly where we want to be.
- We Are Now the Experts: Merchants may be confused by this. The salesperson who can confidently and simply explain these new rules for surcharging and card acceptance is the one who will earn their trust—and their business.
- Surcharging/ dual pricing is a Massive Door-Opener: This is your new icebreaker. “Are you aware of the new, simplified surcharging rules coming from Visa and Mastercard? Let’s do a free analysis to see how much you could save by implementing a program.”
- Destroy the “Rates Only Go Up” Objection: This is your silver bullet. When a merchant says all processors are the same and fees just keep climbing, you can say: “Actually, we’re entering a new era. Visa and Mastercard are set to reduce interchange rates and cap them for five years. My job is to make sure you’re set up to get every cent of those savings.”
- The “Cost Control” Pitch: Your new pitch isn’t just about a low rate; it’s about cost control. You can now offer them a multi-pronged strategy:
- We’ll ensure you get the full benefit of the coming interchange reduction.
- We’ll analyze your transactions to see if it makes sense to use the new “acceptance flexibility” rules to decline costly card types.
- We’ll walk you through the new simple dual pricing or surcharging rules to help you offset your remaining costs.
This isn’t just an update; it’s a whole new playbook. Start familiarizing yourself with these changes now. The salespeople who master this message first will be the ones who dominate the market when these rules go live.
Source Document: You can read the full, (very) confusing SEC filing here: Source Document:
You can read the full SEC filing here: CLICK
Let’s get ready.
Happy Selling,
David
Payment Lynx Daily 