A proposed settlement announced in late 2025 could change this dynamic. While still subject to court approval, the settlement’s provisions may reshape how merchants approach card acceptance, pricing, and checkout strategy.
For decades, merchants accepting Visa or Mastercard have followed the “honor all cards” rule: if you accept one credit card from a network, you must accept them all. This includes basic consumer credit cards, high-end rewards credit cards with higher interchange fees, and commercial credit cards. Merchants have had little control over which cards to accept, making this rule a central issue in long-running antitrust litigation against Visa and Mastercard.
What Is Changing?
The most significant shift is that the “honor all cards” rule would be restructured by card category, not applied universally. Merchants would be able to choose whether to accept specific categories of Visa and Mastercard products, rather than being forced to accept every card issued on those networks. The expected categories are:
- Standard consumer credit cards (basic, non-premium)
- Premium or rewards consumer cards (with enhanced rewards or benefits, typically higher interchange fees)
- Commercial or business cards (often the most expensive for merchants to accept)
For example, a merchant could accept standard consumer cards but decline premium rewards or commercial cards. This marks a meaningful departure from long-standing network rules and gives merchants more theoretical control over payment costs.
What Merchants Would Be Allowed to Do
If approved, the settlement would allow merchants to:
- Select which card categories to accept: Merchants could tailor acceptance policies based on cost, customer demographics, or margin considerations.
- Disclose acceptance policies clearly: Merchants would need to communicate which card categories they accept, typically through signage at the point of sale and online checkout disclosures.
- Apply surcharges where legally permitted: The settlement reinforces merchants’ ability to surcharge credit card transactions (generally capped around 3%, subject to state law). Surcharging can be applied selectively, allowing merchants to offset higher costs associated with premium or commercial cards rather than declining them outright.
- Steer customers toward lower-cost payments: The combination of category-based acceptance and surcharging could make steering more practical. Merchants may encourage debit, cash, or standard consumer cards when appropriate.
Why This Matters for Merchants of Different Sizes
- Small and midsize businesses: For smaller merchants, interchange fees are often one of the largest variable operating costs. The ability to decline the most expensive card categories could help manage margins, especially in low-ticket or low-margin environments. However, small businesses must weigh cost savings against the risk of customer dissatisfaction if commonly held rewards cards are not accepted.
- Large and enterprise merchants: Larger retailers may have more negotiating leverage with payment processors and issuers, but they also face high customer expectations around payment acceptance. Many may continue accepting all card categories but use the new rules as bargaining leverage or selectively surcharge certain cards to recover costs.
- E-commerce and Omnichannel Sellers: Online merchants may find category-based acceptance more challenging to implement smoothly, as checkout abandonment is a real concern. Still, surcharging or clear disclosures at checkout could become more common if the settlement is approved.
Practical Limitations and Real-World Considerations
Despite the apparent flexibility, many merchant groups argue the changes may be less impactful in practice:
- Rewards cards dominate the market: Most credit cards in circulation are rewards or premium products. Declining those cards could mean turning away a substantial portion of customers.
- Consumer expectations: Many shoppers assume Visa and Mastercard acceptance is universal. Confusion or frustration at checkout could outweigh interchange savings.
- Operational complexity: Training staff, updating POS systems, managing signage, and handling customer disputes all add friction.
- Lack of pricing clarity: Merchants don’t have visibility to the exact interchange costs associated with each card type until after the transaction, making it difficult to determine which cards to accept.
As a result, critics argue that while merchants can reject certain card categories, many won’t, especially in competitive retail environments.
Timing and Uncertainty
None of these changes are in effect yet. The settlement must still receive judicial approval, a process expected to extend into late 2026 or early 2027. Significant opposition from major retailers could delay or alter the final outcome, or potentially derail the settlement altogether.
What Merchants Should Do Now
Even though the settlement is not final, merchants should begin preparing by:
- Reviewing current interchange costs by card type
- Talking with payment processors about technical capabilities
- Assessing customer sensitivity to surcharges or card restrictions
- Monitoring legal developments and court rulings
Bottom Line
The proposed changes to the “honor all cards” rule represent one of the most significant potential shifts in U.S. card acceptance policy in decades. While the practical impact remains uncertain, merchants of all sizes should understand the new options, limitations, and strategic choices the settlement could introduce. Whether used aggressively or simply as leverage, the ability to differentiate between card types could become an important tool in managing payment costs—if and when the deal is approved.
Final Thought
The proposed settlement introduces several important changes, but the changes to the “honor all cards” rule may be more difficult to operationalize than many assume. Understanding how interchange truly works—and how processors price their services—remains key to managing payment costs.