The Settlement Is Not Final. What You Can Already Do Is.

Card processing is the line on a small business P&L that owners complain about most and act on least, partly because the rules are genuinely complicated and partly because a headline about a multi-billion-dollar settlement arrives every couple of years and everyone waits to see what happens.

Worth separating those. The settlement is not in force. The rights you already have are, and most merchants are not using them.

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Look Behind the Curtain

The long-running interchange case sits in federal court in Brooklyn. A 2024 settlement was rejected outright by the judge then presiding. A new one was announced in November 2025 and received preliminary approval in June 2026, which is not the same as final approval. Hundreds of merchants and trade groups have filed objections, and at least one association has said it will appeal if the deal is finally approved. Nothing in it binds anybody yet.

What it would do is worth knowing. The headline terms are a ten basis point reduction in the average effective credit interchange rate for five years, posted rates frozen at March 2025 levels for the same period, and a cap of one and a quarter percent on standard consumer credit for eight years. More interesting structurally, it would loosen the honor-all-cards rule so a merchant could decline whole categories, commercial or premium rewards cards, while still taking every card inside any category they do accept.

Now the part already in force. Both networks permit surcharging on credit cards today, under their own published rules. Visa caps it at three percent and never above your actual cost of acceptance. Mastercard's cap is four percent or your average effective discount rate, whichever is lower. If you take both, three percent is your practical ceiling. You must notify the network and your acquirer thirty days in advance, post signage at the entrance and at the point of sale, and show the surcharge as its own line on every receipt. Debit and prepaid cards may never be surcharged, including when a debit cardholder chooses the credit option.

State law overrides all of it in a few places. Connecticut, Massachusetts, Maine and Puerto Rico prohibit credit card surcharges outright, and Maine's ban covers debit as well. Oklahoma moved the other way: a 2025 law that took effect in November now permits surcharging there, capped at the lesser of two percent or your actual processing cost. Several published guides, including one the card networks themselves still host, have not caught up with that change.

The Capability Multiplier

The leverage for a small operator is that the alternative to surcharging is legal everywhere and always has been.

A cash discount posts the card price as your regular price and takes something off for cash, check or debit. Economically it is the same trade. Legally it is a different animal: it is not a network-regulated practice, it carries no cap, it needs no registration, and it is expressly carved out of every state statute that bans surcharging. In Connecticut and Massachusetts it is the only version available to you.

The second advantage is that most merchants have never read their own statement. The effective rate, total card fees divided by total card volume, is one division and it is the only number that matters. Owners who run it usually find they are paying meaningfully more than the headline rate they were quoted, because of monthly fees, batch fees, PCI fees and non-qualified downgrades that nobody explained.

The third is steering without surcharging at all. Asking for debit, or offering an ACH option on larger invoices, moves the mix without touching a posted price, and nobody notices it.

The Sovereign Action

An hour with last month's statement.

- Calculate your effective rate: total card fees divided by total card volume. That single number tells you whether anything here is worth doing.

- Check your state before anything else. Surcharging is banned in Connecticut, Massachusetts, Maine and Puerto Rico, and newly allowed with a two percent cap in Oklahoma.

- If you surcharge, do it properly: notify the networks and your acquirer thirty days ahead, sign the entrance and the register, itemize it on the receipt, cap it at three percent, and never apply it to debit or prepaid.

- If you would rather not, run a cash discount instead. It is legal in every state and carries none of the network paperwork.

- Treat the settlement as news, not a plan. It is preliminarily approved, under objection and likely to be appealed, so do not price anything around it yet.

We encourage all readers to consult a qualified financial professional — such as a registered investment adviser or licensed broker — before making any investment decision.