A federal judge in Brooklyn has given the green light, at least preliminarily, to a $38 billion settlement between Visa, Mastercard, and millions of US merchants. The deal resolves, or attempts to resolve, a two-decade-old antitrust case over credit card swipe fees that has become one of the longest-running commercial lawsuits in American history.

US District Judge Brian Cogan granted preliminary approval on April 27, 2026, setting the stage for a potential final sign-off later this year. The settlement was first announced in November 2025, eight bumpy months after a previous version of the deal was tossed out by the court.

A second attempt after a $30B rejection

An earlier proposal worth roughly $30 billion was rejected in June 2024 by US District Judge Margo Brodie. Her reasoning was blunt: the projected savings for merchants were, in her words, “paltry.”

The revised $38 billion deal represents a meaningful bump in value. Under the new terms, interchange fees, the charges merchants pay every time a customer swipes a Visa or Mastercard, would be reduced by approximately 0.1 percentage points per year over the next five years.

The settlement also modifies what’s known as the “honor all cards” rule. Previously, this policy effectively forced merchants to accept every card a payment network issued, regardless of how expensive the processing fees were. The revised terms give merchants more flexibility to steer customers toward cheaper payment options, a concession retailers have been pushing for since the original lawsuit was filed in 2005.

Twenty-one years and counting

The original complaint, filed in 2005, alleged that Visa and Mastercard collusively set interchange fees while enforcing anti-competitive rules that blocked merchants from seeking alternatives.

Not everyone is celebrating the latest development. The National Retail Federation, one of the largest merchant trade groups in the country, has publicly opposed the revised terms. Their argument is that even $38 billion doesn’t go far enough to reform how Visa and Mastercard set fees in the first place. The NRF and allied groups contend the settlement treats symptoms rather than the underlying disease: a duopoly that controls the vast majority of card-based payment processing in the US.

Preliminary approval is exactly what it sounds like. It’s a procedural checkpoint, not a final ruling. The court will now notify class members, solicit objections, and eventually hold a fairness hearing before deciding whether to grant final approval.