The largest US merchants are trying to block the Visa and Mastercard settlement before its November hearing. Whatever the court decides, the 10-basis-point cut is the smaller part of the deal. The part worth modelling is the right to say no to expensive cards, and most checkout and acceptance stacks cannot exercise it yet.
On 22 September, Walmart, Circle K and the National Association of Convenience Stores filed objections in the US District Court for the Eastern District of New York, asking Judge Brian Cogan not to approve the settlement Visa and Mastercard reached with merchant class counsel last November. The objection turns on a procedural point with large consequences. The settlement's rule changes would bind every merchant in a mandatory class, with no right to opt out. Walmart argues that breaches due process under the Fifth and Fourteenth Amendments and amounts to an unlawful taking of its own legal claims.
"Before an absent class member is compelled to participate in a vast reordering of significant economic relationships," Walmart told the court, "due process requires opt-out rights."
Class counsel must respond by 14 October. The final approval hearing is set for 16 November. The litigation began in 2005, and the court has already turned down two earlier versions of this deal, most recently in June 2024.
What is on the table
The terms announced in November 2025 have four parts that matter to a finance team:
a reduction in the average effective credit interchange rate of 10 basis points for five years (the rejected 2024 version offered seven);
a cap of 1.25% on interchange for standard consumer credit cards for the deal's eight-year term;
relaxation of the honour-all-cards rules, so merchants can decline certain higher-cost card categories and surcharge some of them;
a US$21m programme to educate merchants on acceptance and cost.
Most commentary has weighed the first item and found it small. NACS called the deal "more smoke and mirrors". On the fee cut alone, that is fair. For a merchant with US$500m a year in credit card volume, 10 basis points is about US$500,000. Material, but not strategic.
The third item is a different kind of asset. It is not a price change. It is an option, and options are worth whatever the holder is able to do with them.
Pricing the option
The value of being allowed to refuse or surcharge premium cards depends on three things: how much of your volume runs on them, how much more they cost than a standard card, and how many of those customers would switch to another payment method rather than walk away.
Illustration: fee cut versus acceptance option
Input | Assumption | Annual value |
|---|---|---|
Credit card volume | US$500m |
|
Fee cut | 10 bp on all credit volume | ≈ US$500,000 |
Premium share of credit volume | 20% (US$100m) |
|
Cost gap, premium versus standard | 60 bp | ≈ US$600,000 at stake |
Recovered by surcharge or steering | Half of premium spend moves or is surcharged; none lost | ≈ US$300,000 |
Illustrative assumptions, not market data. Replace the premium share and cost gap with figures from your own acquirer statements. The point is the order of magnitude: on plausible inputs the option is worth as much as the fee cut, and it is the only part of the deal whose value depends on what the merchant does.
The last row is where the uncertainty sits. Premium cardholders tend to be higher-spending customers, and refusing their card is a commercial decision as much as a financial one. A grocery chain, a fuel retailer and a B2B supplier will answer it differently. For some, the right answer will be to keep accepting everything and use the threat of refusal in negotiations with their acquirer. That is still a use of the option.
Why most merchants cannot exercise it yet
To refuse or surcharge a card category you have to know which category the card is in at the moment of payment, before the customer leaves. That sounds trivial. Operationally it is not.
The information exists. Networks and acquirers can identify a card's product type from its number range and the data returned during authorisation. But many merchants never receive that detail in real time, because nothing in their checkout needed it. Point-of-sale software, e-commerce checkouts and invoicing portals were built on the assumption that a Visa is a Visa. Finance teams see the card mix after the fact, in interchange-level statements, if they ask for them.
Surcharging adds its own layer: disclosure at the point of sale, network notification rules, and state laws that restrict or cap surcharges in some places. None of it is exotic, but none of it can be stood up between a court order and the following month's close.
That is why the largest merchants and the smallest are in different positions. A merchant with its own negotiated rates, an in-house payments team and the leverage to sue has less to gain from a uniform rulebook and more to lose by being bound to it. Walmart's objection is, at bottom, about being bound. The middle of the market, which cannot negotiate bespoke terms and cannot fund its own litigation, is the group for whom the option is most valuable, and least ready to use.
Two scenarios, one set of preparations
If Judge Cogan approves the deal on or after 16 November, appeals are likely, and the eight-year clock runs from approval. If he rejects it, the status quo continues and the litigation goes on. A finance team cannot know which, but most of the useful preparation is the same either way.
Worth doing before the hearing
Ask your acquirer for interchange-level reporting by card product, not blended rates. Measure premium and commercial card share by channel and by site.
Find out whether your acquirer or gateway can return card category in real time at authorisation, and what it costs to receive it.
Map where you would apply a surcharge or refusal (online, in store, on invoices) and which state rules apply to each.
Build the model with your own numbers, including a customer-loss assumption agreed with whoever owns revenue.
If you accept card payments on invoices, check how the final terms treat the card types your customers use before assuming any change applies to you.
The fee cut, if it arrives, will show up on its own. The option will not. It is worth precisely nothing to a merchant whose systems cannot see what card is being presented, and that work starts with a data request, not a court ruling.
Sources. Objections, arguments, Walmart quotation and 14 October deadline from Payments Dive, 22 September 2026. Final approval hearing date from Payments Dive, 16 September 2026. Settlement terms and NACS response from Payments Dive, November 2025; the precise card categories that may be declined or surcharged are set out in the settlement documents and should be checked there. Figures in the illustration are assumptions and are labelled as such. FinancyHub is independent journalism, not legal or procurement advice. Corrections are made openly on this page.
