Daylight at the End of the Tunnel?
Coming Milestones in the Visa/Mastercard Antitrust Case
The case is approaching a climax, with Final Approval hearing scheduled for Nov. 16.
June 22, 2026 – Businesses that accept credit cards and payments industry insiders can take heart: we may be seeing daylight at the end of the long, 21-year tunnel that is the merchant antitrust litigation against Visa and Mastercard. The latest news applies specifically to the “equitable relief” branch of the case that seeks changes in Visa and Mastercard rules and interchange rates going forward, as opposed to the branch of the case providing cash payouts to merchants based on their past card volume (the cash payouts for that branch of the case commenced last year and will likely be completed next year; public, quarterly updates on the pace of the payouts should commence in July or August). In the equitable relief case, a final approval hearing is scheduled for November 16, and with the judge seeming inclined in favor of the proposed settlement, merchants could see an expansion of their rights to decline or surcharge cards as early as next March or April, with the settlement’s promise of rate caps and a 10 basis point average reduction in credit card interchange rates possibly taking effect in October of next year. Still, even if the judge grants final approval, many things must happen before the settlement would take effect, including the possibility of a court staying the settlement while legal appeals play out.
Following an April hearing and his June 9 decision granting preliminary approval of the settlement, Judge Cogan on June 13 issued a Class Settlement and Scheduling Order. That order established timelines in advance of November 16 for merchant Objectors to submit further arguments against the settlement and for supporters of the settlement to respond. What most merchants will see over the next few months is extensive publicity of the soon-to-be-established case website and toll-free number for merchants to learn more, including how to submit their own objections with the court if they feel the rules and rate relief provided by the settlement are insufficient.
Going into the November 16 hearing on final approval, the judge has so far seemed skeptical of the idea that merchants would be better off rejecting the settlement and taking the case to trial as the merchant Objectors have proposed. During the April hearing, Judge Cogan remarked that, if he were trying the case himself, he would likely pare back the networks’ Honor All Cards rules with a “knife, not a meat cleaver”, possibly arriving at the same outcome as the settlement. When an attorney for one of the merchant Objectors said they regarded the settlement as so bad they would rather lose everything at trial than have to endure the settlement, Judge Cogan responded, “Careful what you wish for”—reminding them that losing everything at trial was a possibility, and a risk that might not be worth taking.
More recently, in his June 9 decision granting preliminary approval, Judge Cogan often seemed dismissive of arguments against the settlement, determining that many of those objections were being reasonably addressed in the settlement, while describing other arguments as contradicting what merchant Objectors have said in the past. The impression one gets from the June 9 decision is of a judge who, rightly or wrongly, wants to get on with things, perhaps wary of the case outlasting his tenure on the bench, as it has for other judges before him.
What happens following the November 16 hearing and the judge’s decision likely to follow in December or January? Figure 1 below shows key legal milestones before and after the final approval hearing. Inevitably there would be a flurry of legal wrangling following final approval, as the merchant Objectors act on their right to appeal and possibly seek a stay of the settlement. If granted, whether by Judge Cogan or the Second Circuit, a stay would freeze everything until the appeal is resolved, potentially another 12 to 18 months. However, the criteria for granting a stay rely heavily on a party’s likelihood to prevail in their appeal and on whether denying the stay would cause irreparable harm, and it’s not clear that the Objectors could satisfy those requirements. In fact, it’s possible that Visa and MC would argue that a stay is what would create irreparable harm, by further delaying rules and rate relief to the 12 million merchants who have been waiting 21 years already for such relief. An additional consideration of the court will be the value to all parties to the case—and to the public—of finality. With the Second Circuit having heard appeals of numerous aspects of the case over its 21-year pendency, they may see finality as a benefit not just for the public, but as a benefit for the Second Circuit as well.
Assuming there is no stay following final approval, there would also be a flurry of activity by the card networks and the payments industry toward implementing the settlement, aspects of which could be in force as early as March or April, though the promised 10 bps of systemwide average rate relief would likely not take effect until October 2027. Figure 2 below shows key milestones toward implementation of the settlement, including, by the 90-day mark, the right of merchants to treat cards differently for acceptance and for surcharging, whether . . .
- by brand, i.e., treating Visa differently from MC, without regard to how American Express and Discover cards are treated;
- or by product category, i.e., different treatment of the newly designated “Standard”, “Premium” and “Commercial” categories;
- or by specific card product, e.g., Visa Signature versus Visa Infinite, or MC World versus MC World Elite.
While merchants would be prohibited from treating different bank issuers’ cards differently for acceptance and surcharging (i.e., you would still be required to accept a Chase Visa Signature if also accepting other Visa Signature cards, and you couldn’t surcharge a Citibank Mastercard differently from other issuers’ Mastercard products), a merchant would have the right to offer discounts for selected issuers’ cards and not others’ (for example, if the merchant were to negotiate a deal directly with an issuer, which would be allowed).
Importantly, to help merchants navigate the new rules, the proposed settlement includes a $21 million merchant education campaign, to be paid for by Visa and Mastercard and overseen by the merchant class counsel, with the goal of helping merchants understand the new rules and how to benefit from them. Given the scope of the proposed changes and uncertainty for merchants trying to implement them, it’s doubtful any of the parties to the case—whether merchants, or Visa, or Mastercard—will argue against the education campaign.
Lou Morsberger is the founder and CEO of Payments Strategy Consulting, LLC, based in Chevy Chase, Maryland, which advises merchants and trade associations on payments and card acceptance strategy. www.paystratcon.com
Figure 1: Legal Milestones
| Legal Milestones Before Final Approval Hearing | ||
| April 27, 2026 | Hearing re preliminary approval | |
| June 9, 2026 | Preliminary Approval – Memorandum of Decision & Order, per Judge Cogan | |
| June 13, 2026 | Class Settlement Notice & Scheduling Order, per Judge Cogan | |
| Following Scheduling Order of June 13: | ||
| “As soon as practicable” | Notice Plan to merchants to commence, including Case Website, post office box, and toll-free telephone line | |
| w/in 45 days: | Notice Plan to be substantially complete | |
| w/in 90 days: | Objections to final approval of settlement to be filed | |
| w/in 120 days: | Responses to objections to be filed by defendants (i.e., Visa and MC) and by merchant class counsel | |
| Nov. 16, 2026 | Final approval hearing | |
| Legal Milestones Following Final Approval by Court (If Granted): | ||
| If 75 days have passed without appeal, OR if an appeal, 10 days following court decisions and exhaustion of all further avenues to appeal | “Settlement Final Date” | |
Figure 2: Implementation Milestones
| Selected Implementation Milestones, Should Court Grant Final Approval(Assuming no stay of settlement pending an appeal) | |
Within 90 days of Final Approval | Visa and Mastercard to modify rules:discounting and non-discrimination rules to permit differential treatment of cards by brand, product type (Standard, Premium, Commercial), product (e.g., Signature versus Signature Preferred); discounts also permissible based on issuer of cardpermit merchants to accept or decline products based on product type (Standard, Premium, Commercial, Debit)newly issued cards to include “visual product identification” of newly designated product types (Standard, Premium, Commercial) to enable merchants to treat cards differently should they choose to do so under the new ruleselectronic identification of newly designated product types available to merchants to enable merchants to treat cards differently should they choose to do so under the new rules “Honor All Wallet” rules to permit merchants to decline selected digital walletssurcharging rules to permit merchants to selectively surcharge based on brand, product, or product type (surcharging based on card issuer not permitted; surcharging of debit cards not permitted)to have modified rules to remove any restrictions on merchant buying groups pursuing negotiations with Visa and/or MC for preferred rates |
| No earlier than 4 months following Final Approval, AND coinciding with an April or October V/MC semi-annual business enhancement update | Average Effective Rate Limit to take effect based on calculations provided by Independent Auditor (Visa and MC are to have previously submitted plans to the Auditor and the Court detailing how they’ll implement the 10-bp reduction in Average Effective Rate, including the 125-bp limit on Standard Card interchange) |