# The Market Speaks: Visa/Mastercard Settlement Shows Why Congress Should Sit Down on the CCCA

Published: 2026-06-18

Highlights:

- After two decades of litigation, a federal judge granted preliminary approval of the $38 billion Visa/Mastercard interchange fee settlement, delivering real merchant relief through the courts, not Congress.

- The settlement ends the “Honor All Cards” rule, cuts interchange rates, and expands surcharging rights, and the plaintiffs’ own expert estimated it will generate $224 billion in total benefits, including to consumers.

- With the Credit Card Competition Act (CCCA) proponents arguing legislation is the only path to merchant relief, this settlement is Exhibit A for why market-based solutions work, and why Congress should stand down.

Last week, a federal judge [handed down](https://www.reuters.com/world/us-judge-oks-visa-mastercard-38-billion-swipe-fee-settlement-2026-06-09/) a ruling that reframes the entire debate over credit card swipe fees, and Congress should be paying attention.

The ruling granted preliminary approval of a $38 billion settlement between Visa, Mastercard, and a class of more than 12 million merchants who alleged that the two payment networks violated federal antitrust law. U.S. District Court Judge Brian Cogan [found the settlement](https://storage.courtlistener.com/recap/gov.uscourts.nyed.249477/gov.uscourts.nyed.249477.9884.0.pdf) to be “fair, reasonable and adequate” under the governing legal standard.

Merchants first sued Visa and Mastercard in 2005, alleging the payment networks had locked in fees well above competitive levels. What followed was nearly twenty years of litigation. A 2024 settlement attempt, worth around $30 billion, fell short – the court called it too small and too narrow. So the parties went back to negotiations, and produced the revised agreement. The ruling is an important milestone, but its significance extends beyond the courtroom. 

The settlement delivers that relief without a single act of Congress:

- Fee reductions: The combined average effective credit interchange rate will be cut by 10 basis points for five years, with standard consumer rates capped at 1.25% for at least eight years.

- End of “Honor All Cards”: Merchants can now decline higher-cost premium and commercial cards, ending the rule that previously forced them to accept every card in a network’s portfolio or none at all.

- Expanded surcharging rights: Merchants gain greater flexibility to surcharge customers who use more expensive card products.

- Merchant education: A $21 million fund will help businesses of all sizes understand and use their new tools.

Nobel Prize-winning economist Joseph Stiglitz (who was retained by the plaintiff merchants) [estimated the changes](https://www.reuters.com/world/us-judge-oks-visa-mastercard-38-billion-swipe-fee-settlement-2026-06-09/#:~:text=Two%20experts%20hired%20by%20the%20plaintiffs%2C%20Nobel%20Prize%2Dwinning%20economist%20Joseph%20Stiglitz%20and%20University%20of%20Washington%20professor%20Keith%20Leffler%2C%20said%20the%20changes%20could%20save%20merchants%20%2438%20billion%20by%202031%20%E2%81%A0and%20provide%20%24224%20billion%20%E2%80%8Bof%20benefits%20overall%2C%20including%20to%20consumers.) could save merchants $38 billion by 2031 and deliver $224 billion in total benefits, including to consumers. When even the plaintiffs’ own expert calls it a massive win, the case for congressional intervention collapses.

Merchants and payment networks spent two decades fighting in court, negotiated under real legal pressure, and reached terms a federal judge found fair. This is how market accountability works. 

Some legislators have renewed their push for the CCCA, which would impose government-engineered market intervention. These proponents have argued that legislation is the only way to meaningfully reduce merchant costs. This settlement is Exhibit A for why that argument does not hold up.

Pinpoint has [previously documented](/the-point/rediscovering-failed-policies-the-credit-card-competition-act/) why the CCCA would be a repeat of the failures of the Durbin Amendment, which in 2010 imposed price controls on debit interchange fees. Instead of passing savings along to consumers, retailers pocketed the difference. About [1 million](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2446080#:~:text=%2D%20These%20fee%20increases%20and%20loss%20of%20access%20to%20free%20checking%20contributed%20to%20an%20increase%20in%20the%20unbanked%20population%20of%20approximately%201%20million%20people%2C%20mainly%20among%20low%2Dincome%20families.) more people became unbanked, as banks responded by cutting free checking and scaling back debit rewards. A [University of Chicago study](https://chicagounbound.uchicago.edu/law_and_economics/652/#:~:text=Our%20estimate%20is%20that%2C%20based%20on%20the%20expectations%20of%20investors%2C%20the%20present%20discounted%20value%20of%20the%20losses%20for%20consumers%20as%20a%20result%20of%20the%20implementation%20of%20the%20Durbin%20Amendment%20is%20between%20%2422%20and%20%2425%20billion.) put consumer losses from the Durbin Amendment at an estimated $22-25 billion.

The CCCA was supposed to be the only fix. This settlement says otherwise.

Read More:

- [Rediscovering Failed Policies: The Credit Card Competition Act](/the-point/rediscovering-failed-policies-the-credit-card-competition-act/)

- [The Federal Reserve’s Debit Card Interchange Fee Proposal: Perfecting Failure](/the-point/the-federal-reserves-debit-card-interchange-fee-proposal-perfecting-failure/)

- [New from Pinpoint: Why a 10% Credit Card Interest Rate Cap Would Harm Consumers and the Economy](/news/new-from-pinpoint-why-a-10-credit-card-interest-rate-cap-would-harm-consumers-and-the-economy/)

- [Pinpoint Policy Institute Joins Conservative Coalition to Oppose Price Controls on Credit Cards](/news/pinpoint-policy-institute-joins-conservative-coalition-to-oppose-price-controls-on-credit-cards/)