Mastercard and Visa would let 12 million US merchants refuse premium cards; a judge hears it November 16
A proposed settlement lets 12 million US merchants refuse premium Visa and Mastercard cards for the first time. Amex's chief says good luck, and Mastercard's 14% quarter shows why the networks could afford the giveaway.
Vincent Jiang · 3 min read
Merchants won the right to refuse premium cards
A merchant war that began in 2005 is ending in a Brooklyn courtroom, and the headline prize for a class of more than 12 million US merchants is the right to refuse a premium Visa+2.52% — Visa, up 2.52 percent today or Mastercard+4.36% — Mastercard, up 4.36 percent today card while still accepting the cheaper ones 2.
American Express+1.87% — American Express, up 1.87 percent today chief Stephen Squeri, whose premium cards have never carried such a rule, was asked about the concession on Friday. His answer: "Good luck." He expects "consumer outrage" if stores start turning cards away 1. Judge Brian Cogan hears the final approval request on November 16, 2026 2.
The rule change costs nothing if nobody uses it
The money in the deal sits elsewhere: credit interchange falls 10 basis points for five years, standard consumer cards get a 1.25% rate for eight, and merchants paid an average swipe fee of 2.35% in 2024 2. The honor-all-cards concession is the piece merchants fought for, and the doubters sit on their own side.
Dan Stiel, a former card executive who now advises merchants, calls premium-card customers "exponentially more profitable" than debit users and the change an "empty benefit" 1. Walmart+2.14% — Walmart, up 2.14 percent today and the big retail trade groups still object; the networks' lawyers call them "a vocal minority" of the class 2.
The quarter that pays for the peace
Mastercard's third-quarter print showed why it could hand the rule over. Net revenue rose 14% to $9.8 billion, adjusted earnings of $5.31 a share beat the $5.17 consensus, and the adjusted operating margin reached 60.5% 34. The card network grew 11% while rebates and incentives to issuing banks jumped 18%, and value-added services grew 19% 3.
Services grew nearly twice as fast as the card network
Data
| Value | |
|---|---|
| Value-added services | 19% |
| Cross-border volume | 11% |
| Payment network revenue | 11% |
| Switched transactions | 9% |
| Gross dollar volume | 7% |
The war is getting cheaper to carry: a $74 million charge for merchants who opted out of the class, with accrued litigation down to $262 million from $800 million at December 31, 2025 3. Shares opened nearly 4.6% higher on a print the morning's coverage sold as an AI and stablecoin push 56.
Twelve straight quarters of double-digit revenue growth
Data
| Net revenue | |
|---|---|
| Q4 '23 | $6.55B |
| Q1 '24 | $6.35B |
| Q2 '24 | $6.96B |
| Q3 '24 | $7.37B |
| Q4 '24 | $7.49B |
| Q1 '25 | $7.25B |
| Q2 '25 | $8.13B |
| Q3 '25 | $8.6B |
| Q4 '25 | $8.81B |
| Q1 '26 | $8.4B |
| Q2 '26 | $9.28B |
| Q3 '26 | $9.8B |
Visa printed the same growth, with a bigger bill
Visa, the co-defendant, printed 13% revenue growth on October 27 and booked a fresh $469 million provision for the same interchange case 7. The fee gap between the two networks was the subject of The Inference's preview this week.
November 16 decides the overhang
Approval would close a case both networks have already paid down: Visa carries $1.7 billion of provisions for it this fiscal year 7, and Mastercard's accrual stands at a third of its January level 3. Rejection would reopen a trial the networks argue they would win 2. The tell after the ruling is commercial, not legal: the first large retailer that publicly declines a premium card. Twenty years of litigation bought merchants a door, and their own advisers are telling them not to walk through it.
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