EddieJayonCrypto
23 Oct 25
Payment giants Visa and Mastercard agreed to a $199.5 million settlement in a class-action lawsuit over chargeback rules, which allegedly burdened merchants with fraud costs. The resolution highlights ongoing tensions between payment networks and businesses, despite the companies denying wrongdoing.
**Visa and Mastercard Agree to $199.5 Million Settlement in Class-Action Lawsuit** In a significant development, payment giants Visa and Mastercard have agreed to pay a combined $199.5 million to resolve a class-action lawsuit that has been pending in court since 2016. The settlement, reported by Reuters, addresses allegations that the companies forced businesses to bear the financial burden of fraudulent transactions involving counterfeit, lost, and stolen cards. The lawsuit, which targeted Visa and Mastercard, accused the companies of antitrust violations through coordinated changes to chargeback rules. These changes, according to the plaintiffs, increased merchant costs without reducing transaction fees. Merchants were particularly impacted if they delayed upgrading their point-of-sale (POS) systems to process chip-enabled cards, a requirement that allegedly left them vulnerable to financial penalties. Under the settlement, Visa will contribute $119.7 million, while Mastercard will pay $79.8 million. This follows previous settlements by Discover and American Express, which paid a combined $32.2 million. Notably, all four companies have denied any wrongdoing, maintaining that their practices were lawful and in the best interest of the payment ecosystem. Details regarding how merchants will receive their share of the settlement remain undisclosed. The resolution marks a pivotal moment for small and medium-sized businesses that had long criticized the financial strain imposed by the chargeback system. The case highlights ongoing tensions between payment networks and merchants over the allocation of fraud-related costs. While the settlement provides some closure, it also underscores the complexities of balancing security, innovation, and fairness in the digital payments landscape. As the distribution process unfolds, stakeholders will be closely watching to see how the funds are allocated and whether this agreement sets a precedent for future disputes in the industry.