1. A multi-year reduction in credit-card interchange
Visa and Mastercard have agreed to reduce average credit interchange rates by approximately 10 basis points (0.10%) for five years.
For SMBs operating on thin margins, this could be meaningful—but only if your the way you pay for payment processing allows you to benefit (more on that later).
2. Caps on key interchange categories
The settlement also places a rate cap on “standard” U.S. consumer credit cards (non-premium, non-rewards cards) at 1.25% (125 basis points).
This helps provide cost predictability, which matters for businesses that want to forecast operating costs and avoid future fee escalation.But card issuers could re-classify cards to remove them from the standard category. I know– I have done this at a past job..
3. Indirect savings through expanded steering options
The settlement allows merchants greater freedom to:
- Steer customers toward lower-cost cards
- Offer discounts for cheaper payment types
- Surcharge more flexibly
- Decline certain high-fee premium cards
While not strictly “interchange,” these rule changes enhance the value of lower interchange because they give SMBs more tools to manage payment costs strategically.
Why Most SMBs Won’t See Savings Automatically
Even if interchange goes down, your fees may not—depending on the pricing model your acquirer uses.
Most SMBs today are on one of these plans:
- Tiered pricing (“qualified / mid-qualified / non-qualified”)
- Flat-rate pricing (e.g., Square’s or Stripe’s single blended rate)
Both models block SMBs from ever seeing interchange reductions.
The acquirer (or payment facilitator) simply keeps the savings.
Only merchants on Interchange-Plus or Subscription/IC+ hybrid plans will automatically benefit from lower interchange.
What SMBs Should Do Now to Realize the Settlement Benefits
To actually capture the lower interchange rates, SMBs need to take proactive steps with their acquirers or payment processors and ensure they are paying the in a way that allows them to see the benefits (FYI Payments Roundup wrote about the components of a billing statement earlier this year: https://payments-roundup.com/example-q1-2025-article-6/)
1. Move to Interchange-Plus (IC+) pricing
This is the most important action.
On IC+ pricing, your cost equals:
- Actual interchange plus
- Card-network fees plus
- Fixed processor markup
- Card-network fees plus
So when interchange drops, your costs drop automatically.
SMBs should ask specifically for:
- IC+ pricing, with
- Per-transaction fees under 10¢
2. Lock in the markup so acquirers cannot offset the reduction
Acquirers may try to raise their own markup once interchange falls.
To prevent this, SMBs should request language such as:
“Processor agrees not to increase the basis-point or per-transaction markup fees for five years.”
This synchronizes the contract with the length of the settlement’s rate-reduction period.
3. Require true pass-through of network fees
SMBs should insist on:
- No markups on Visa/Mastercard assessments
- No new “regulatory,” “program,” or “network” fees
- No billback or “non-qualified” upgrades
If a fee rises, the acquirer must show the official network bulletin.
4. Remove or renegotiate junk fees
Many SMBs pay unnecessary fees that dilute interchange savings.
Request the removal of:
- Annual fees
- Statement fees
- Monthly minimums
- Batch fees
- “Service” or “technology” fees
The simpler and more transparent the plan, the more likely the SMB will benefit from interchange relief.
5. Conduct annual statement audits
SMBs should review pricing at least annually to ensure interchange and network reductions are truly reflected in their effective rate.
Bottom Line: Interchange Savings Are Real—But Only If SMBs Act
The settlement provides real economic relief for merchants, but the structure of the U.S. acquiring market means SMBs must take deliberate steps to capture those savings:
- Switch to Interchange-Plus
- Lock in the processor markup
- Ensure true pass-through of all network fees
- Remove junk fees
- Audit statements regularly
SMBs that take these steps will be positioned to realize the full benefit of the settlement’s interchange reductions—while those who remain on tiered or flat-rate pricing will see little to no change.