Visa and MasterCard reach $30 billion deal that will reduce merchant fees

(CNN) — The world’s two largest credit card networks, Visa and MasterCard, as well as the banks that issue cards with them, have agreed to settle a decades-old antitrust case brought by merchants.

The deal aims to reduce the swipe fees merchants pay when customers make purchases with Visa or MasterCard by $30 billion over five years, according to a news release announcing the deal Tuesday morning.

The settlement, which applies only to US traders, is the result of a lawsuit filed in 2005. However, nothing is considered final until it gets approval from the US District Court for the Eastern District of New York. Still, the case could also be appealed, which could lead to a lengthy battle.

According to the National Retail Federation, swipe fees typically cost merchants 2% of total transactions made by a customer, but can be as high as 4% for some premium rewards cards. The agreement would reduce those rates by at least 0.04 percentage points for at least three years.

Kim Lawrence, president of Visa in North America, said in a statement Tuesday morning that the rewards currently offered to Visa cardholders will not be affected. Additionally, Americans’ access to credit will not be further restricted as a result of the agreement, he said.

Mastercard spokesman Seth Eisen told CNN that access to rewards and credit also will not be affected by the deal.

Tuesday’s news comes just a month after Discover and Capital One announced a merger that, if approved by financial regulators and shareholders, would create the nation’s largest credit card company.

Shares of Visa and MasterCard rose slightly on Tuesday morning after the deal was announced.