November 12, 2025 • 9 mins
There’s no direct savings that’s guaranteed to consumers, although if businesses were to pass on merchant fee savings the average family (household) would expect to see savings averaging $154 per year.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Do you have questions? Brian has answers. It's time for
today's Q and A of today. This is the Brian
mud Show. Today's You nay, visa and MasterCards, Thattle, merchant
fees case what it means to you. This is brought
to you by Immell listen ashes check marked elections. Each
day I feature a listener question that is sent by
(00:26):
one of these methods. You may email me Brian Mud
at iHeartMedia dot com in the up on social at
Brian mud Radio. May also use the iHeartRadio talk back
feature we love it. If you'd love us, go into
the iharready WEP, make w J and O. Or if
you're a patriot, your number one preset while you're in there,
we love it. If you made the Brian Mudshow podcast
(00:47):
your number two preset. You'll also see a little microphone button.
You see it, you tap it. You may lay down
the message right there. Maybe a topic or question for
a future.
Speaker 2 (00:55):
Q and A.
Speaker 1 (00:56):
Today's note is this, would you categorize merchant fees a
three three percent give or take tax on all goods
and services?
Speaker 2 (01:04):
Why?
Speaker 1 (01:05):
Or why not? Okay, So this at the onset might
sound a little walking. You're like merchant fees. This does
come from the perspective of a business owner. However, it
does have an impact on everybody at some level, and
I'm going to boil it down to the specific impact
to you. So let's get into this. On Monday, you
(01:27):
had a landmark settlement that was announced with Visa and MasterCard,
pretending to a multi decade debate and legal battle over
what are known as merchant fees or interchange fees, following
a twenty twenty four ruling that a proposed settlement offered
by the two payment processing companies was inadequate. Now, the
(01:47):
settlement probably the biggest recent news that most people aren't
familiar with because it impacts most people in actually even
most days, sixty five percent of all transactions are now
made with credit or debit cards, and seventy three percent
of all spending is handled through payment processors that impose
(02:07):
fees on the merchants to accept their services. And Joe
and I were thinking earlier, and I could not come
up with a time that I last made a purchase
with cash.
Speaker 2 (02:23):
I do not usually have cash on me to begin with.
Every once in a while you'll find a place that
wants cash. There are places that still, you know, cash only.
It doesn't happen often, but.
Speaker 1 (02:36):
I have cash on me, but it is generally just
for tips if that comes up, valet that kind of thing. Yeah,
but otherwise I really cannot remember the last time I
just made a cash purchase. It's been a while. So
on that note, typically consumers are not familiar with the
(02:57):
impact of merchant fees unless they're transacting with the business
or government, because almost all governments have been imposing merchant
fees for years now. But when they are passed along
to customers, And this is something you've noticed, Joel.
Speaker 2 (03:15):
I've noticed these search charges, little credit card search charges
more and more frequently in I would say recent months.
Speaker 1 (03:24):
Well, it's really been rising in recent years. Not so
much necessarily months all they could be like a specific
place you go to have changed their policy, but yeah,
the rate has steadily been rising in over the past
few years, and now forty one percent of all businesses
(03:45):
have taken the policy of passing on merchant fees imposed
on them by processors to customers. Now that in mind,
let's take a look at the visa and MasterCard settlement
to see what the impact might be. And again, this
first piece right here is going to sound a little
bit wonky because it is stuff that makes more sense,
(04:07):
again at the business level than a will to will
to you at the consumer level. But swipe fees are
going to be cut by at least zero point one
percentage point for five years.
Speaker 2 (04:19):
That sounds like a lot of money right there. I
gotta tell.
Speaker 1 (04:21):
You, looking forward to that zero point one percent savings,
all right, this one would be a little bit more impactful.
These standard consumer card rates are going to be capped
at one and a quarter percent. That is actually a
twenty five percent reduction on that particular fee. And again
I'm going to come back around because you're like, this
(04:42):
still means nothing to me. I don't understand what it is.
It's okay, that's going to be in place for eight years.
Merchants gain flexibility to accept or to clin specific card categories.
This is one that you could end up seeing, and
it really could end up being a bit of a
master or tangled web. I'm not sure you're going to
(05:05):
see merchants travel down the path of selected selective of
acceptance of visa a MasterCard. But here's what this means.
Merchants would have the ability to accept some Visa in
MasterCards without accepting others. Today, you either take Visa a
master card or you don't. But maybe it's a base
(05:28):
Visa or MasterCard rather than a premium rewards card. Well
we'll take the base card, we won't take the premium rewards.
That's the kind of thing that could end up happening here.
It's an option under this settlement. We'll see where that goes.
More options to impose surcharges on card payments, and the
total likely value of this settlement exceeds thirty billion dollars now.
(05:54):
Visa and MasterCard say that it gives merchants relief, flexibility
lower costs, especially small businesses. The National Retail Federation and
Merchant Payments Coalition oppose it, calling it insufficient, while arguing
that it still fails to address the Judge's concerns, it
keeps fees too high, and it still forces businesses to
(06:16):
accept expensive rewards cards or risk losing customers. For their part,
banking and payment industry groups represented by the Electronic Payments Coalition,
they support it, stating that the twenty five percent plus
rate cut rate years is larger than even pending Senate
legislation that is aimed at addressing merchant fees. Now, while
(06:41):
one note on this, While the settlement deals in place,
it still has to receive court approval from US District
Judge Margo Brody in Brooklyn in order for this to
take effect. So we'll see where that goes. But should
the settlement be ratified, total savings is expected to be
approxic only six point three billion dollars per year. Okay,
(07:06):
So what does.
Speaker 2 (07:07):
This look like?
Speaker 1 (07:07):
Well, the average business currently accepting Visa and MasterCard would
save approximately nineteen hundred dollars annually. Okay, so not nothing,
you know, nineteen hundred dollars savings for your average business,
But that number is going to vary massively, with small
savings for a low transaction, low volume businesses, and savings
(07:30):
that could be into the millions annually for the largest
high volume retailers. Now, there is no direct savings that
is guaranteed to consumers. Although let's say that businesses were
to pass the merchant fee savings on to customers, the
average family, the average household would expect to see Joel
(07:53):
has been warming up his drum drum rows a year
one hundred and fifty four dollars per year. Hey, that's
all you got? Yeah, okay, not gonna get excited.
Speaker 2 (08:09):
I'll take it.
Speaker 1 (08:10):
In case, we'll take it. I mean you don't have
to no, no, yeah, that kind of attitude. Business is
probably got to just pocket it.
Speaker 2 (08:16):
I'm just I'll take it. I'll take it.
Speaker 1 (08:19):
You didn't even know this thing existed before this?
Speaker 2 (08:21):
No, I hadn't heard this on Monday, that's for sure,
or yesterday. Yeah.
Speaker 1 (08:25):
So, as for the question as to whether I see
merchant fees as the tax I don't. For two reasons.
They're not imposed by governments, but rather private companies and
related merchants, and customers retain choice as to how they shop,
where they shop, how they pay. Now, that's said as
a forward business owner, I'm sympathetic to businesses which effectively
(08:47):
feel as though they've been trapped into having to accept
and perhaps even eat the cost of fees by payment processors.
And this is often due to the type of business
and the way that consumers choose to transact with those businesses.
Small businesses often operate at a competitive disadvantage, as fees
are typically imposed on a percent or a transaction fee
(09:08):
that is higher for low volume businesses. So the more
transactions you do, the more businesses you do, typically the
better rates you get. So naturally put small businesses at
a disadvantage, and a lot of businesses in highly competitive
situations just may not be in a position to pass
the cost HOLINGK to customers, creating additional affordability challenges. So
(09:29):
I get it from a businesses perspective. But anyway, we'll
see where this settlement goes, and that's what you could
expect to see if it does go somewhere.
Do you have questions? Brian has answers. It's time for
today's Q and A of today. This is the Brian
mud Show. Today's You nay, visa and MasterCards, Thattle, merchant
fees case what it means to you. This is brought
to you by Immell listen ashes check marked elections. Each
day I feature a listener question that is sent by
(00:26):
one of these methods. You may email me Brian Mud
at iHeartMedia dot com in the up on social at
Brian mud Radio. May also use the iHeartRadio talk back
feature we love it. If you'd love us, go into
the iharready WEP, make w J and O. Or if
you're a patriot, your number one preset while you're in there,
we love it. If you made the Brian Mudshow podcast
(00:47):
your number two preset. You'll also see a little microphone button.
You see it, you tap it. You may lay down
the message right there. Maybe a topic or question for
a future.
Speaker 2 (00:55):
Q and A.
Speaker 1 (00:56):
Today's note is this, would you categorize merchant fees a
three three percent give or take tax on all goods
and services?
Speaker 2 (01:04):
Why?
Speaker 1 (01:05):
Or why not? Okay, So this at the onset might
sound a little walking. You're like merchant fees. This does
come from the perspective of a business owner. However, it
does have an impact on everybody at some level, and
I'm going to boil it down to the specific impact
to you. So let's get into this. On Monday, you
(01:27):
had a landmark settlement that was announced with Visa and MasterCard,
pretending to a multi decade debate and legal battle over
what are known as merchant fees or interchange fees, following
a twenty twenty four ruling that a proposed settlement offered
by the two payment processing companies was inadequate. Now, the
(01:47):
settlement probably the biggest recent news that most people aren't
familiar with because it impacts most people in actually even
most days, sixty five percent of all transactions are now
made with credit or debit cards, and seventy three percent
of all spending is handled through payment processors that impose
(02:07):
fees on the merchants to accept their services. And Joe
and I were thinking earlier, and I could not come
up with a time that I last made a purchase
with cash.
Speaker 2 (02:23):
I do not usually have cash on me to begin with.
Every once in a while you'll find a place that
wants cash. There are places that still, you know, cash only.
It doesn't happen often, but.
Speaker 1 (02:36):
I have cash on me, but it is generally just
for tips if that comes up, valet that kind of thing. Yeah,
but otherwise I really cannot remember the last time I
just made a cash purchase. It's been a while. So
on that note, typically consumers are not familiar with the
(02:57):
impact of merchant fees unless they're transacting with the business
or government, because almost all governments have been imposing merchant
fees for years now. But when they are passed along
to customers, And this is something you've noticed, Joel.
Speaker 2 (03:15):
I've noticed these search charges, little credit card search charges
more and more frequently in I would say recent months.
Speaker 1 (03:24):
Well, it's really been rising in recent years. Not so
much necessarily months all they could be like a specific
place you go to have changed their policy, but yeah,
the rate has steadily been rising in over the past
few years, and now forty one percent of all businesses
(03:45):
have taken the policy of passing on merchant fees imposed
on them by processors to customers. Now that in mind,
let's take a look at the visa and MasterCard settlement
to see what the impact might be. And again, this
first piece right here is going to sound a little
bit wonky because it is stuff that makes more sense,
(04:07):
again at the business level than a will to will
to you at the consumer level. But swipe fees are
going to be cut by at least zero point one
percentage point for five years.
Speaker 2 (04:19):
That sounds like a lot of money right there. I
gotta tell.
Speaker 1 (04:21):
You, looking forward to that zero point one percent savings,
all right, this one would be a little bit more impactful.
These standard consumer card rates are going to be capped
at one and a quarter percent. That is actually a
twenty five percent reduction on that particular fee. And again
I'm going to come back around because you're like, this
(04:42):
still means nothing to me. I don't understand what it is.
It's okay, that's going to be in place for eight years.
Merchants gain flexibility to accept or to clin specific card categories.
This is one that you could end up seeing, and
it really could end up being a bit of a
master or tangled web. I'm not sure you're going to
(05:05):
see merchants travel down the path of selected selective of
acceptance of visa a MasterCard. But here's what this means.
Merchants would have the ability to accept some Visa in
MasterCards without accepting others. Today, you either take Visa a
master card or you don't. But maybe it's a base
(05:28):
Visa or MasterCard rather than a premium rewards card. Well
we'll take the base card, we won't take the premium rewards.
That's the kind of thing that could end up happening here.
It's an option under this settlement. We'll see where that goes.
More options to impose surcharges on card payments, and the
total likely value of this settlement exceeds thirty billion dollars now.
(05:54):
Visa and MasterCard say that it gives merchants relief, flexibility
lower costs, especially small businesses. The National Retail Federation and
Merchant Payments Coalition oppose it, calling it insufficient, while arguing
that it still fails to address the Judge's concerns, it
keeps fees too high, and it still forces businesses to
(06:16):
accept expensive rewards cards or risk losing customers. For their part,
banking and payment industry groups represented by the Electronic Payments Coalition,
they support it, stating that the twenty five percent plus
rate cut rate years is larger than even pending Senate
legislation that is aimed at addressing merchant fees. Now, while
(06:41):
one note on this, While the settlement deals in place,
it still has to receive court approval from US District
Judge Margo Brody in Brooklyn in order for this to
take effect. So we'll see where that goes. But should
the settlement be ratified, total savings is expected to be
approxic only six point three billion dollars per year. Okay,
(07:06):
So what does.
Speaker 2 (07:07):
This look like?
Speaker 1 (07:07):
Well, the average business currently accepting Visa and MasterCard would
save approximately nineteen hundred dollars annually. Okay, so not nothing,
you know, nineteen hundred dollars savings for your average business,
But that number is going to vary massively, with small
savings for a low transaction, low volume businesses, and savings
(07:30):
that could be into the millions annually for the largest
high volume retailers. Now, there is no direct savings that
is guaranteed to consumers. Although let's say that businesses were
to pass the merchant fee savings on to customers, the
average family, the average household would expect to see Joel
(07:53):
has been warming up his drum drum rows a year
one hundred and fifty four dollars per year. Hey, that's
all you got? Yeah, okay, not gonna get excited.
Speaker 2 (08:09):
I'll take it.
Speaker 1 (08:10):
In case, we'll take it. I mean you don't have
to no, no, yeah, that kind of attitude. Business is
probably got to just pocket it.
Speaker 2 (08:16):
I'm just I'll take it. I'll take it.
Speaker 1 (08:19):
You didn't even know this thing existed before this?
Speaker 2 (08:21):
No, I hadn't heard this on Monday, that's for sure,
or yesterday. Yeah.
Speaker 1 (08:25):
So, as for the question as to whether I see
merchant fees as the tax I don't. For two reasons.
They're not imposed by governments, but rather private companies and
related merchants, and customers retain choice as to how they shop,
where they shop, how they pay. Now, that's said as
a forward business owner, I'm sympathetic to businesses which effectively
(08:47):
feel as though they've been trapped into having to accept
and perhaps even eat the cost of fees by payment processors.
And this is often due to the type of business
and the way that consumers choose to transact with those businesses.
Small businesses often operate at a competitive disadvantage, as fees
are typically imposed on a percent or a transaction fee
(09:08):
that is higher for low volume businesses. So the more
transactions you do, the more businesses you do, typically the
better rates you get. So naturally put small businesses at
a disadvantage, and a lot of businesses in highly competitive
situations just may not be in a position to pass
the cost HOLINGK to customers, creating additional affordability challenges. So
(09:29):
I get it from a businesses perspective. But anyway, we'll
see where this settlement goes, and that's what you could
expect to see if it does go somewhere.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Medal of Honor: Stories of Courage
Rewarded for bravery that goes above and beyond the call of duty, the Medal of Honor is the United States’ top military decoration. The stories we tell are about the heroes who have distinguished themselves by acts of heroism and courage that have saved lives. From Judith Resnik, the second woman in space, to Daniel Daly, one of only 19 people to have received the Medal of Honor twice, these are stories about those who have done the improbable and unexpected, who have sacrificed something in the name of something much bigger than themselves. Every Wednesday on Medal of Honor, uncover what their experiences tell us about the nature of sacrifice, why people put their lives in danger for others, and what happens after you’ve become a hero. Special thanks to series creator Dan McGinn, to the Congressional Medal of Honor Society and Adam Plumpton. Medal of Honor begins on May 28. Subscribe to Pushkin+ to hear ad-free episodes one week early. Find Pushkin+ on the Medal of Honor show page in Apple or at Pushkin.fm. Subscribe on Apple: apple.co/pushkin Subscribe on Pushkin: pushkin.fm/plus
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com