Visa-Mastercard Merchants Have Been Paid $631.7M So Far

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Visa-Mastercard Merchants Have Been Paid $631.7M So Far
Visa-Mastercard Merchants Have Been Paid $631.7M So Far
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Visa and Mastercard merchants have now received $631.7 million from the $5.5 billion interchange damages settlement, Payments Dive reported Oct. 12.

That money only goes to businesses that accepted Visa or Mastercard between January 2004 and January 2019 and filed by Feb. 4, 2025, so most stores launched in the last five years get nothing. The number that matters to a high-ticket store owner is the card fee you pay next year. The same Brooklyn court holds a Nov. 16 hearing on a separate deal that would cut credit interchange by 0.1 point, let merchants refuse premium cards and loosen surcharging.

Below are the payout figures with baselines, the difference between the two deals, what premium-card refusal would do to the margin on a $2,000 order, and what to check this week. I follow card rules at Ecommerce Paradise because they set your margin. If you are new to the model, start with what high-ticket dropshipping is.

Affiliate disclosure: some links in this article are affiliate links and I may earn a commission at no cost to you. It does not change which tools I recommend or what the research found.

Whatever the card networks get from the court on Nov. 16, your store needs a clean legal entity under it, so form your LLC with Northwest Registered Agent, the best LLC formation service for ecommerce owners. I’d pick Northwest for its 25 years of reliability, something the cheap formation sites that upsell you cannot show. Form your LLC with Northwest →

Visa-Mastercard Payouts Reach $631.7M Across 689,340 Merchants

Merchants have received about $631.7 million to date, according to Payments Dive senior reporter Justin Bachman. Payments have gone to 689,340 merchants, including $212.8 million from a second partial distribution that began in September.

The fund held $5.02 billion as of Sept. 30, after those distributions, against a settlement total of $5.5 billion. About 1.47 million merchants filed claims by the February 2025 deadline, out of roughly 2.12 million merchant tax ID numbers registered as potential payees, per the same report.

The baseline is three months old. Payments Dive reported on July 14 that the fund held $5.17 billion as of June 30 and that the initial distribution totaled $418.9 million across about 599,000 claims. Add the $212.8 million second round to the $418.9 million first round and you get the $631.7 million total. The fund itself fell about $150 million between the two reports.

According to the claims administrator’s site, the class covers U.S. businesses that accepted Visa or Mastercard cards from Jan. 1, 2004, through Jan. 25, 2019. The court granted final approval on Dec. 16, 2019, the Second Circuit issued its opinion on March 15, 2023, and the Feb. 4, 2025 claim deadline has passed. Payments for approved claims in the second distribution go out on a rolling basis starting in September 2026.

U.S. District Judge Brian Cogan in Brooklyn approved the second distribution in June. U.S. Magistrate Judge Joseph Marutollo approved $21.4 million in fees for the administrator, Epiq, covering April through August. The next quarterly claims report is due in January.

The same Oct. 12 report says Walmart, Circle K and DoorDash oppose a different proposed settlement, the one covering injunctive relief, and have urged Cogan to reject it. He set the hearing on that deal for Nov. 16, per Payments Dive’s Sept. 15 coverage, and a final approval decision could come by year-end.

Nov. 16 Hearing Decides Premium-Card Refusal and Surcharge Rules

The payout money and the fee changes come from two deals in the same lawsuit, which dates to mid-2005. The $5.5 billion fund settles damages for past swipe fees. The Nov. 16 hearing is about injunctive relief, meaning rule changes going forward, and the coverage I reviewed describes rule changes for that deal, not a cash fund.

Cogan gave preliminary approval on June 9 to an amended settlement, according to Payments Dive. It trims credit interchange by 10 basis points, at varying rates, for five years and sets a 1.25% rate for standard consumer cards for eight years. Merchants could decline some higher-cost premium and commercial credit cards, a break from the networks’ honor-all-cards rule, and would gain new rights to surcharge or offer discounts that steer customers to cheaper cards.

Crowdfund Insider’s Sept. 19 summary puts the surcharge allowance at up to 3%. Payments Dive’s coverage gives no surcharge cap, disclosure rules or effective dates, so treat the 3% as one outlet’s figure until the final order is public.

Merchants paid a weighted average of 2.35% on Visa and Mastercard transactions in 2024, per Nilson Report data cited by Payments Dive. The history matters for odds. An appeals court scuttled a 2016 pact, and Judge Margo Brodie rejected a $30 billion deal in June 2024 that would have cut fees 0.07 percentage points over five years, according to Reuters’ June 10 report.

The $38 billion figure in headlines is an estimate of merchant savings by 2031 from two experts hired by the plaintiffs, economist Joseph Stiglitz and University of Washington professor Keith Leffler, per the same Reuters report. It is the plaintiffs’ case, not an audited number.

Walmart and about 1,000 merchants filed a 299-page objection calling the relief “temporary and meager” and arguing the deal gives Visa, Mastercard and large banks “sweeping” immunity, per Payments Dive. Walmart has filed similar decertification requests before, and the court declined them, most recently in late 2025. The Merchants Payments Coalition counts 978 objectors, according to Crowdfund Insider. The National Association of Convenience Stores has said it will appeal to the Second Circuit if final approval is granted.

The other side has a case too. Richard Hunt, executive chairman of the Electronic Payments Coalition, called the settlement “a guaranteed win for Main Street,” according to Payments Dive’s June 9 report. Visa attorney Michael Shuster told the court at the April 27 hearing, “It is a big give,” and argued a trial would take years while the settlement helps merchants soon, per Payments Dive. Cogan wrote that none of the objectors had persuaded the court they could get more through trial.

I covered the political side of fee reform on Oct. 10 in Trump Backs Credit Card Competition Act: What Store Owners Do. Visa’s separate dispute-rule change is in Visa Widens Chargeback Evidence Rules From Oct. 24.

What Premium-Card Refusal and 10 bps Mean for Store Margins

My read: the payout is a footnote for most store owners and the Nov. 16 hearing is the story. Everything below is my opinion and hypothetical math, not reported figures.

Start with the cut. A store running $1.5 million a year in card volume at the 2.35% average pays about $35,250 in fees. If a 10 basis point cut passed through in full, that is $1,500 a year. It will not pass through in full, because the cut applies to posted credit interchange at varying rates and your processor’s markup and network fees sit on top. If you are on flat-rate pricing, I would not assume you see any of it until your processor says so in writing.

The premium-card option is the part I’d model hardest. High-ticket buyers skew toward rewards cards, and that is my read, not a measured fact. Objectors put it this way in Crowdfund Insider’s account: “Turning them away would mean turning away most customers.”

Run the numbers on a $2,000 order. Say a premium card costs one point more than a standard card, which is $20. If your gross profit on that order is $500, refusing the card pays off only if fewer than 4% of those buyers walk away ($20 divided by $500). I would not bet a 4% walk-away rate on a $2,000 purchase, and objectors including Walmart argued in April that big merchants cannot easily refuse premium cards because customers want them.

Surcharging has the same problem. A 3% surcharge on $2,000 is $60 added at the last step of checkout, which is where high-ticket sales die. A cleaner test is a bank-transfer discount framed as a discount rather than a fee. Read your payments terms on Shopify or whatever platform you use before touching checkout pricing, and check your state’s surcharge rules.

Plan for three outcomes. If Cogan grants final approval, watch for implementation dates, because none has been published. If he denies it, the 2005 case drags on and nothing about your fees changes. If NACS appeals after approval, as it says it will, expect the new rules to sit in limbo while the Second Circuit decides. In all three, this week’s move is the same: know your effective rate.

Timing is the uncertainty. Payments Dive reports no effective dates, final approval could come by year-end, and NACS says it will appeal. I would not build Q4 pricing around a ruling that has no published start date.

None of this is hard on a $50,000 store. It gets heavy when you run several processors, cross-border buyers and a supplier who ships the product while you carry the dispute risk. Card mix, chargeback evidence, reserves and backup rails all pull on each other, and that load is exactly what my team takes off store owners through the turnkey done-for-you service.

Disputes are where card rules hit cash flow first. A screening service such as ClearSale can catch risky big-ticket orders before they ship. My chargeback prevention guide for high-ticket stores covers the process side.

Concentration risk is the other lesson. If one rule change or one hold hits your only processor, you want a second rail ready, which is the point of my processor backup plan post.

I also wrote a setup guide for Airwallex for cross-border high-ticket stores. If it fits your setup, open an account through the Airwallex link.

For a reality check on how thin fees can make the model, read The Brutal Truth About High-Ticket Dropshipping Nobody Tells You. Stablecoin rails are another way some stores may cut card exposure, and I covered Shopify’s move in Open USD Goes Live With Shopify as a Co-Owner.

Card rules, processor backups and chargeback evidence all land on the store owner, and they eat the hours you need for sales. Want my team to build and run your high-ticket store for you? See the turnkey done-for-you service →

Check Your Processing Fees Before the Nov. 16 Ruling

Six actions, in the order I’d do them:

  1. Pull your last three months of processor statements and compute your effective rate: total fees divided by card volume. If your Shopify Payments or processor dashboard splits volume by card type, write down the premium and commercial share.
  2. Ask your processor in writing whether you are on flat-rate or interchange-plus pricing and whether a 10 basis point interchange cut would pass through to you.
  3. Log processing fees as their own line in your books so you can price any change. Finaloop is built for ecommerce bookkeeping. FreshBooks works if you keep your own books.
  4. Price one premium-card scenario using the walk-away test above: fee gap on your average order divided by your gross profit per order. Write the number down before the ruling so you are not guessing later.
  5. Read Visa’s chargeback evidence rules that start Oct. 24 and make sure your order confirmations, delivery proof and customer communication logs are saved per order.
  6. Put Nov. 16 and the January claims report on your calendar, and do not change checkout pricing until the final order is public. If you want a second set of eyes on your fees, Explore Turnkey Builds.

Frequently Asked Questions

Can my store still claim part of the $631.7 million?
The administrator lists Feb. 4, 2025 as the claim deadline, and it has passed. Payments Dive’s Oct. 12 report does not say whether late claims are possible. If you filed, check your status in the Merchant Portal on the administrator’s site.

Does the Nov. 16 hearing change my fees right away?
No. It is a hearing, not a ruling, and none of the coverage I reviewed gives an effective date for the fee or rule changes.

Can I refuse premium cards today?
Not under the networks’ honor-all-cards rule as the coverage describes it. The settlement would create that option if it gets final approval, and your processor agreement controls until then.

How much would the 10 bps cut save me?
At most $1,000 per $1 million in card volume, before your processor’s pass-through. That is hypothetical math, and flat-rate pricing may not pass any of it along.

Is the $38 billion savings figure reliable?
It is an estimate by two experts hired by the plaintiffs, per Reuters. Treat it as the plaintiffs’ case.

Where do I start if I do not have a store yet?
Start with my free mini course. Then pull the high-ticket niches list to pick a category.

What order should I build a new store in?
My launch checklist walks through the build order, from the legal entity to payments.

Want to work through card fees and checkout pricing with other store owners and me inside the community? Join the Skool community →

I’m not a lawyer or financial advisor, and the settlement terms above come from the cited coverage and may change at final approval. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.

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