Not long after news of the merchant card fee settlement began circulating, a client who runs a growing trade supply business got in touch with a question that caught my attention: “If merchants are being compensated for historical card fees, how do I know what I’m paying today is fair?” Despite processing significant annual card volume, he couldn’t explain the difference between interchange, scheme fees, and acquirer charges. His finance team could see the monthly bill. They couldn’t see the pricing decisions hidden inside it.
A US federal judge has just handed small merchants exactly this kind of decision, at scale, for the first time. On 9 June, Judge Brian Cogan in Brooklyn gave preliminary approval to a settlement between Visa, Mastercard and the roughly 12 million merchants who sued them over interchange fees — a fight that has run for 21 years. Final approval is not expected before 2029, and an appeal is already being flagged by merchant lobbyists who think the deal still favours the networks. But the terms are significant enough to plan around now.
The settlement scraps the “honour all cards” rule that has bound US merchants for decades. For the first time, a retailer can accept a customer’s standard consumer Visa while declining their premium travel-rewards card, or reject commercial cards altogether. Interchange on standard consumer credit is capped at 1.25 per cent for eight years; the broader effective rate drops by 10 basis points over five. Merchants also get wider latitude to surcharge. None of this is trivial — merchants paid a weighted average of 2.35 per cent on Visa and Mastercard transactions in 2024, according to the Nilson Report — but the interesting part isn’t the rate. It’s the decision-making the rate now requires.
Here is the part the settlement’s architects seem to have half-noticed and then underfunded. Buried in the terms is a line for a “merchant education program about payment acceptance and cost management.” One line, no detail on scope, no indication of who delivers it or to whom. The card networks have effectively conceded that the people now empowered to categorise cards, price surcharges and steer customers toward cheaper payment methods have no particular reason to know how to do any of that. Then they wrote a single clause about it and moved on.
I have watched this exact gap play out before, because the UK and EU already ran this experiment. Brussels capped interchange at 0.3 per cent for credit and 0.2 per cent for debit back in 2015, more than a decade before Washington got anywhere near it. If a hard cap were sufficient to close the capability gap, UK merchants would by now be sophisticated readers of their own payment costs. Most aren’t. Acquirer statements remain close to unreadable for a business owner without a finance background; blended pricing still obscures what any given card actually costs to accept; surcharging rules under the UK’s Payment Services Regulations get applied inconsistently or not at all, often out of simple uncertainty about what’s permitted. A rate cap changes what a merchant is owed. It does nothing to change whether they know they’re owed it, or how to collect.
That gap sits in an unglamorous place — the layer between the card network and the merchant’s bank account. Merchants aren’t billed by Visa or Mastercard directly; a processor, a PayFac, or increasingly a software platform sits in between, and a headline rate reduction has to survive that intermediary’s own margin before it reaches anyone’s till. US merchants are about to discover what UK merchants already know: the acquirer or PayFac relationship is where savings quietly disappear, and almost nobody renegotiates that relationship because almost nobody has been taught how.
This is where Vogue Boost’s founding premise comes from, not the other way round — we built a fintech upskilling company because the pattern kept repeating across every part of financial infrastructure I’d worked in. Regulators and networks fix the plumbing. Nobody teaches the people standing next to the taps how to use them.
None of this argues against the settlement, appeal risk and all. Ending “honour all cards” is a genuine transfer of leverage from networks to merchants, and merchants should take it. But leverage unused is not leverage at all, and a merchant who doesn’t know she can now decline a loss-making commercial card is no better off than one operating under the old rule. The three-tier card categorisation this settlement introduces — commercial, premium consumer, standard consumer — is itself a decision layer most small business owners have never had to navigate, and there’s no natural constituency responsible for teaching them.
So the question for policymakers on both sides of the Atlantic isn’t whether interchange caps or settlement terms are generous enough. It’s who is accountable for making sure the businesses affected can actually act on them. The FCA, the Payment Systems Regulator and their US counterparts have spent years negotiating the price of the plumbing. It’s time someone was made responsible for the people who have to use it.
