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Visa and Mastercard have agreed to a $30 billion settlement that would limit credit and debit card fees for retailers. The settlement announced on Tuesday would also allow consumers to benefit from the lower fees, giving them some savings.

Antitrust Settlement of Visa and Mastercard

According to Reuters, the antitrust settlement is one of the largest in US legal history, and it seeks to resolve most claims in nationwide litigation dating back to 2005.

For years, merchants have accused Visa and Mastercard of imposing exaggerated swipe fees on transactions and enforcing restrictive "anti-steering" policies that barred retailers from directing customers toward cheaper means of payment.

According to Bankrate.com, these swipe fees, or interchange fees, which average around 1.5% to 3.5% per transaction, usually include small fixed charges and a percentage of total sale amounts.

Visa and Mastercard to Lower Wipe Rates

Under the settlement terms, Visa and Mastercard have agreed to lower swipe rates by four basis points, or 0.04 percentage points, over three years and ensure an average rate that is seven basis points below the current average for five years.

They also agreed to cap rates for five years and eliminate anti-steering provisions, giving merchants more flexibility in offering discounts or implementing surcharges on cards with higher interchange fees.

While some merchants already notified customers of potential card surcharges at checkout, the settlement promises broader implications.

Court documents show that the fee rollbacks and caps are worth $29.79 billion. Both card networks maintain their innocence in agreeing to settle.

Visa's North American president, Kim Lawrence, asserted that the agreement addressed "true pain points" raised by small businesses, while Mastercard's General Counsel, Rob Baird, said it provided businesses "substantial certainty."

The settlement came a year after the federal appeals court in Manhattan, New York, upheld a $5.6 billion antitrust class-action settlement with around 12 million retailers accusing Visa and MasterCard of improperly fixing credit and debit card fees.