Visa and Mastercard Agree to $199.5M Settlement Over Fraud Cost Shift

Visa and Mastercard have accepted a combined $199.5 million settlement to resolve a class-action lawsuit accusing them of forcing merchants to bear the costs of fraudulent transactions involving lost, stolen, or counterfeit cards.

The case, which dates back to 2016, alleged the card networks coordinated rule changes on chargebacks, shifting liability to merchants who had not upgraded to chip-enabled point-of-sale systems. According to the settlement terms, Visa will pay approximately $119.7 million and Mastercard about $79.8 million, while earlier agreements brought Discover and American Express in for another $32.2 million.

Merchants involved in the suit argued their fees and costs rose despite no reduction in transaction pricing, making the settlement a significant, though partial, victory. Both Visa and Mastercard denied any wrongdoing but opted to settle to avoid further legal expense and risk. The agreement still requires court approval, and it represents a broader moment of reckoning in the payments industry over responsibility for fraud and evolving liability structures.

Clever Robot News Desk 25^th October 2025