Visa and Mastercard have put a new offer on the table to end their massive legal fight over transaction costs, and it might totally shake up—or barely touch—how you handle payments and points at the register. Past efforts to fix this twenty-year-old conflict fell apart in front of judges, and this latest plan is also running into legal walls and criticism from everyone involved.
While we were paying willy nilly for our groceries at Walmart with our credit cards, there was an internal battle between businesses and card providers that we were completely oblivious to.
What is the deal actually trying to do?
The proposal comes from the two biggest names in the payment industry, Visa and Mastercard. Shop owners —yes, retail giant Walmart included—have complained for years that these giants are overcharging them for the price of running credit cards. These transaction costs are usually called interchange or “swipe fees.”
“Okey, but how does this even affect me? I’m only a customer”
Right now, the old rules say that if a store takes Visa, they have to take every single type of Visa card. The same goes for Mastercard. They aren’t allowed to just take basic Visa cards while saying no to the fancy Signature or Infinite versions.
Those elite cards usually come with better points and benefits, which means they cost the shops more money to process. (In fact, your rewards are mostly paid for by those fees the stores get charged.)
However, this new plan would shake up that “honor all cards” policy. Stores would get the power to decide which types of cards to take from three specific groups: business cards, basic cards with no perks, and premium cards that earn points. Mastercard stated that small businesses are going to benefit here thanks to more options for payment, lower expenses, and easier regulations.
If a store chooses to take basic Visas but blocks the “premium” ones, you might find your expensive card with the big annual fee gets turned down.
That could even happen to your free card that earns a steady 1.5% cash back.
An incoming headache for business owners, cashiers and customers alike
You can bet businesses aren’t thrilled about it. Two big groups, the National Retail Federation and the Merchant Payments Coalition, put out statements slamming the deal for falling short.
Stephanie Martz, a top executive at the National Retail Federation, said in a press release that the credit card companies either don’t understand the problem or simply don’t care. She added that the drop in fees is nowhere near enough, and tweaking the rule about accepting every card won’t actually fix anything.
Jennifer Hatcher from the Merchant Payments Coalition pointed out that the plan completely overlooks how 85% of cards out there are rewards cards, so stores basically have no option but to take them. Hatcher warned that banks would probably just shuffle cards into different groups, basically forcing stores to keep taking every card and paying those steep prices.
According to The Wall Street Journal, even some of the big banks are upset about possibly losing the rule that forces shops to take every card.
A few politicians are attempting to fix this through the Credit Card Competition Act, claiming it will drop the transaction costs stores have to pay. That has nothing to do with this specific legal deal, though. Either way, that bill hasn’t really gotten any closer to becoming law since it first came up in 2022, although it did get brought back to Congress in January 2026 once President Trump posted online that he liked it.
For now, we will have to wait to see if stores and other establishments actually start turning down any fancy card you wipe out to pay. So long for that showy friend that likes to use their American Express to pay at a fast food joint.