Visa, Mastercard, and the largest US credit card issuing banks have agreed to a settlement with merchants who have been suing them for nearly two decades over the fees charged for swiping credit cards. The settlement stipulates that the credit card networks and banks will reduce the fees merchants have to pay to accept credit cards. These fees, often referred to as swipe or interchange fees, average around 2%.

The agreement would reduce all rates by 0.04 percentage points for three years, and the average rate across the networks for five years by 0.07 percentage points. The legal team which negotiated the deal for the merchants said this would eliminate fees worth 30 billion dollars over five years. Last year, the networks and banks collected a total of 72 billion dollars in interchange fees, according to the card data company Nilson Report.

The proposed agreement would create some changes to give merchants more choice in accepting cards by allowing them to direct consumers to cards with lower fees. It would also give small businesses the opportunity to band together to negotiate swipe fees, similar to what large retailers do today.

The agreement requires approval by a federal judge in Brooklyn, N.Y. Previous deals stretched over years of judgments and appeals, which could happen again with this pact due to the wide range of involved dealers and their differing opinions.

The heading translates to English as:

"Doug Kantor, General Counsel of the National Association of Convenience Stores, said the agreement provides only modest relief, without really addressing the core issue of the alleged fixing of swipe fees by Visa and MasterCard with the banks. 'I would expect there to be a lot of resistance from merchants against this settlement,' said Kantor."

On Tuesday, Visa stated it was making significant concessions to small businesses. Mastercard said the settlement would bring closure and value to business owners. The legal team representing the plaintiff merchants said the proposed agreement would provide immediate relief from fees and help remove restrictions on their businesses.

Merchants Filed This Controversial Class Action Lawsuit Against Visa, Mastercard, and Banks in 2005. They Alleged that the Card Network Companies and Banks Conspired to Keep Interchange Fees High. Interchange Fees Are Set by the Card Network Companies. Merchants Pay These Fees to the Banks Whenever Consumers Use Credit Cards to Purchase Goods and Services. Although Individually Small, They Add Up to Billions of Dollars Annually.

Here is the translation of the heading to English:

"The merchants wanted the ability to negotiate fees directly with the banks. Visa, Mastercard, and the banks have already settled part of the lawsuit and agreed to pay the merchants nearly 6 billion dollars. Last year, an appellate court confirmed this settlement. The new proposed agreement aims to address the remaining aspects of the lawsuit, where retailers wanted to address what they called the anti-competitive nature of the card networks."

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