In a landmark decision, Visa and Mastercard have reached a settlement over the long-standing dispute regarding swipe fees. This development could potentially save American consumers tens of billions of dollars.

Swipe fees, also known as interchange fees, are paid to credit card companies like Visa and Mastercard for facilitating transactions. These fees, which are typically between 1% to 3% of the sales total, are often passed on to consumers by merchants.

The settlement, announced on Tuesday, will see Visa and Mastercard cap credit interchange fees into 2030. Additionally, the credit card giants will negotiate these fees with merchant buying groups. This move is expected to save U.S. merchants close to $30 billion in swipe fees.

The lawsuit, which dates back to 2005, alleged that merchants were paying excessive fees to accept Visa and Mastercard credit cards. It also claimed that Visa, Mastercard, and their member banks were acting in violation of antitrust laws.

In 2018, Visa and Mastercard agreed to pay $6.2 billion as part of the long-running suit filed by a group of 19 merchants. However, the lawsuit had two unresolved issues: a dispute over the rules Visa and Mastercard impose to accept their cards, and the merchants who chose not to participate in the settlement.

Visa stated that more than 90% of the merchants in Tuesday’s settlement are small businesses. As part of the settlement, Mastercard did not acknowledge any improper conduct. The changes will take effect after approval of the settlement, most likely in late 2024 or early 2025.

This settlement marks a significant shift in the dynamics between credit card companies, merchants, and consumers. It paves the way for a more equitable distribution of costs and could lead to lower prices for consumers.