Swipe fee settlement hearing: a restaurant decision guide
The long-running Visa and Mastercard swipe fee case has a date that matters to restaurants. Judge Brian Cogan of the U.S. District Court for the Eastern District of New York holds a final approval hearing on November 16, 2026, and a decision may come by the end of the year, according to Payments Dive. The settlement got preliminary approval in June. In September, merchants filed a wave of objections asking the judge to reject it.
Restaurants need to know which of the settlement's terms would change their monthly statement and which would only change their options. Below we size each term against one restaurant's numbers, then lay out the decisions in a table.
What happened in September
Merchant comments were due in mid-September. According to a Merchant Payments Coalition release carried by The Green Sheet, 978 businesses and trade associations signed a letter to Judge Cogan calling the deal "riddled with loopholes." They said they "had no part in negotiating" it. Payments Dive names the National Restaurant Association among the more than 900 merchants and trade groups that filed that objection. Walmart filed its own 299-page objection, and a separate group of 29 merchants, including DoorDash and Peet's Coffee, objected too.
The networks stand by the deal. In an October court filing, Visa and Mastercard said the objections "merely reprise the same arguments this Court already considered and rejected" and called the objectors "a vocal minority" (Payments Dive, Oct. 16, 2026). In June, Visa said it believes the settlement "would provide U.S. merchants of all sizes with meaningful relief." Mastercard said the agreement "delivers on the expectations of the court and balances the interests of all parties involved," Payments Dive reports. Two earlier settlements were rejected, one of them in June 2024, so final approval is not a sure thing.
The terms that touch a restaurant
- Interchange cut. Posted credit interchange rates would drop by 0.1 percentage point for five years (Payments Dive). The Merchant Payments Coalition says the cut applies only to the fees that go to card-issuing banks, not to Visa and Mastercard's own network fees (MPC, June 9, 2026).
- Standard card cap. Standard consumer credit cards would carry a 1.25% rate for eight years (Payments Dive).
- Choosing which cards to accept. Merchants could decline some higher-cost premium and commercial Visa and Mastercard credit cards. This is a break from the "honor all cards" rule.
- Surcharging. Merchants could surcharge Visa or Mastercard credit, or both, at the brand or product level, capped at 3% of the transaction. Mastercard's cap was 4% when Arnall Golden Gregory published its summary in November 2025. Disclosure signage is still required, and surcharging by card issuer stays prohibited (Arnall Golden Gregory).
- Timing. If the court approves, Visa and Mastercard have 90 days from approval to change their rules (Arnall Golden Gregory).
Some things don't change. Visa and Mastercard say surcharges may not be applied to debit cards. Connecticut and Massachusetts prohibit credit card surcharges, and Minnesota and New York regulate how merchants can surcharge (Payments Dive, Dec. 2025). A settlement between private parties doesn't override state law.
Worked example: one restaurant, three numbers
The figures below are a hypothetical restaurant, not data from any real business. Plug in your own from your last three processing statements.
- Monthly card sales: $100,000
- Share of card sales on credit (the rest on debit): 75%, or $75,000
- Current all-in effective rate: 3.0%, or $3,000 a month in fees
1. The interchange cut
0.1 percentage point on $75,000 of credit volume is $75 a month, or $900 a year. That's before any question of whether you actually get it. On interchange-plus pricing, a lower interchange line should show up on your statement. On flat-rate or tiered pricing, your rate is set by contract, and the cut reaches you only if your processor lowers that rate. Either way, $900 is about 2.5% of this restaurant's $36,000 in yearly fees.
2. Declining premium cards
Arnall Golden Gregory describes standard consumer cards as "1% cheaper" for merchants to accept than premium products (Arnall Golden Gregory). If that means a full percentage point, and $30,000 of this restaurant's monthly credit volume is on premium cards, moving it to standard cards would save about $300 a month. The catch is that merchants say more than 90% of credit card spending is on rewards cards, so turning those cards away "does not provide us with a real choice" (MPC via The Green Sheet). Turning away a premium card at the end of a $120 dinner costs more than one percentage point.
3. Surcharging credit cards
A 3% surcharge on $75,000 of credit volume brings in at most $2,250 a month. Debit volume can't be surcharged, so the other $25,000 still costs you. Expect less than the maximum, because some guests switch to debit or cash and some don't come back. The objecting merchants also say Visa and Mastercard could set higher fees for merchants who surcharge (MPC via The Green Sheet). The settlement text and your processor's program terms decide that, so read them before you count the $2,250. Our surcharge vs. cash discount calculator models guest switching against your own numbers.
Decision table
| Your situation | Likely best move | Why |
|---|---|---|
| Flat-rate pricing, any volume | Ask your processor in writing whether rate cuts will be passed through | Without pass-through, the 0.1-point cut may never reach you |
| Interchange-plus pricing | Do nothing yet; check the interchange lines after the rules change | The cut shows up on its own; verify it does |
| Located in Connecticut or Massachusetts | Skip credit surcharging; look at pricing or a cash discount instead | State law prohibits credit card surcharges |
| High debit share (e.g., quick service) | Model a cash discount before a surcharge | Debit can't be surcharged, so a surcharge recovers less |
| Full service, high average check, many rewards cards | Don't plan on declining premium cards | The risk of turning away a guest outweighs a saving of roughly 1% |
| Corporate catering or B2B invoicing | Review commercial card volume once the rules are final | Commercial cards are one of the categories merchants could decline or surcharge |
A dated to-do list
- Now, before November 16: Pull three months of statements and write down card volume, debit and credit split, and effective rate. Our effective rate calculator can help.
- Now: Find your processing agreement and confirm your pricing model (flat, tiered, or interchange-plus) and your notice period for rate changes.
- After the ruling: If the deal is approved, the 90-day clock for rule changes starts. Ask your processor when it will support product-level surcharging and card-category acceptance, and what disclosures it will require.
- Before turning on any surcharge: Check your state's rules, keep debit and prepaid cards out, and follow the disclosure requirements in the network rules and your processor's program terms.
- 90 days after any rule change: Compare your effective rate to the baseline from step 1. If the interchange cut isn't on your statement, ask your processor why.
Related: Illinois tips and taxes law
Illinois restaurants should also watch the state's Interchange Fee Prohibition Act, which bars interchange on the tax and tip portion of a sale. A federal court permanently enjoined that provision for most covered entities on June 1, 2026, and lawmakers passed a bill to move the law's effective date to July 1, 2027, which still needed the governor's signature as of June 2026, according to Latham & Watkins. Check the current status before relying on that date.
The bottom line
Card fees are typically a restaurant's third-largest expense after food and wages, according to the National Restaurant Association. The settlement's direct fee cut is small. The bigger effect is new surcharging and card-acceptance options that come with their own costs. Whenever the court rules after the November 16 hearing, knowing your effective rate and your contract terms puts you in a position to act within the 90-day window.
Frequently asked questions
When will the Visa-Mastercard settlement take effect?
Not yet. The final approval hearing is Nov. 16, 2026, and Payments Dive reports a decision may come by the end of the year. If it is approved, Visa and Mastercard have 90 days from approval to change their rules.
Will my restaurant's processing fees go down automatically?
The settlement trims credit interchange by about 0.1 percentage point for five years. On interchange-plus pricing that should show up on your statement. On flat-rate or tiered pricing, it reaches you only if your processor lowers your contracted rate, so ask in writing.
Can I surcharge debit cards under the new settlement?
No. Visa and Mastercard say surcharges may not be applied to debit cards. The settlement's surcharge terms cover credit cards, capped at 3% of the transaction.
Does the settlement let me surcharge in Connecticut or Massachusetts?
No. A settlement between private parties does not override state law, and both states prohibit credit card surcharges.
Should my restaurant stop accepting premium rewards cards?
For most restaurants, probably not. Standard cards are described as about 1% cheaper to accept than premium cards, but objecting merchants say more than 90% of credit card spending is on rewards cards, so declining them risks losing guests.
Sources
- Walmart slams card fee pact, again, Payments Dive, 2026-09-15
- Nearly 1K merchants tell judge proposed settlement is 'riddled with loopholes' (Merchant Payments Coalition release), The Green Sheet / Merchant Payments Coalition, 2026-09-14
- Settled for certain? The latest proposed settlement in the Visa and Mastercard MDL litigation and its likely effect on surcharging, Arnall Golden Gregory LLP, 2025-11-24
- Preliminary court ruling on Visa/Mastercard swipe fees a bad deal for merchants and consumers, Merchants Payments Coalition, 2026-06-09
- Card fees creep onto restaurant tabs, Payments Dive, 2025-12-11
- Merchants assail card fees pact, Payments Dive, 2025-12-15
- Illinois interchange fee law maxes out after permanent injunction and legislative postponement, Latham & Watkins Global Fintech & Digital Assets Blog, 2026-06-08
Checked November 3, 2026. Photo: Andrea Piacquadio / Pexels.
From the KwickOS family
Built by the team behind KwickOS restaurant platform, KwickPOS (cloud + offline hybrid POS, 5,000+ locations) and the KwickPhone AI phone agent.