Visa and Mastercard have reached a settlement to cap credit card fees for retailers, resulting in an estimated US$30 billion of savings over five years.

The antitrust settlement announced on Tuesday (Mar 26) is one of the largest in US history, and upon court approval would resolve claims in litigation that began in 2005.

Retailers had accused Visa and Mastercard of overcharging them on interchange fees, or swipe fees, when shoppers used credit or debit cards, and barring them through “anti-steering” rules from directing customers toward cheaper means of payment.

The settlement would lower interchange rates by four basis points (0.04 percentage points) in the United States for three years, and cap rates for five years.

It would also remove anti-steering restrictions and enable competitive pricing, lawyers for retailers said. REUTERS