We’ve been hearing a lot about this Visa + Mastercard settlement lately, so here’s a quick update and summary of what’s actually going on – and what (if anything) it means for your favorite travel rewards cards.

For over 20 years, merchants have been fighting Visa and Mastercard over one thing: interchange fees (aka swipe fees).

That’s the percentage (usually 1–3%) that credit card networks charge businesses every time you swipe your card.

Now, a major settlement could finally put that battle to rest – and it might even change which credit cards stores choose to accept.

Here’s what’s happening and what it means for your rewards strategy:

The Short Version

Visa and Mastercard recently reached a long-awaited settlement with merchants that:

Slightly reduces interchange fees (about 0.1%, phased in over time)
Lets merchants choose which types of credit cards they want to accept

That second part is the big deal.

Merchants Might Get to Pick Which Cards They Accept

Under the proposed terms (still awaiting court approval), all credit cards would fall into three tiers:

1️⃣ Basic Consumer Cards: e.g. Chase Freedom Unlimited, Citi Double Cash, etc.

2️⃣ Premium Consumer Cards: e.g. Chase Sapphire Preferred, Sapphire Reserve, Capital One Venture X

3️⃣ Business Cards: e.g. Ink Business Unlimited, Venture X Business, Sapphire Reserve for Business

Merchants could technically decide to:

Accept only basic consumer cards,
Reject premium or business cards altogether.

Why? Because premium cards come with higher processing fees – and those fees eat into profit margins.

So in theory, a store could say, “We accept Visa, but not the Sapphire Reserve.”

Will That Actually Happen?

Probably not.

While this sounds dramatic, most businesses aren’t going to risk losing sales over a few cents in fees. Customers tend to spend more when using credit cards, and merchants know it.

Even American Express, famous for its higher swipe fees, is now accepted at the vast majority of stores – because losing 100% of a sale hurts a lot more than paying a 3% fee.

Bottom line: your rewards cards are safe for now.

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