Two of the world’s biggest economies are trying to fix the same problem — the fees merchants pay to accept cards — and this month they could not look more different. In a Brooklyn courtroom, America’s retailers are fighting a proposed $200 billion settlement they say is not worth the paper it is printed on. In Australia, the fix is already law, and it switches on in less than a fortnight.
For anyone who runs, advises or sells to a business that takes cards, the split screen is instructive. It is the clearest demonstration yet of two philosophies for taming card costs — litigate or legislate — and only one of them has produced a firm date.
The American approach: two decades and still no deal
The US settlement traces back to a class action first filed in 2005. The latest proposed resolution between Visa, Mastercard and merchants would, according to the parties, deliver roughly $200 billion in value to retailers over about eight years, largely by trimming interchange rates and loosening the rules that stop merchants steering customers toward cheaper cards.
The problem is that a growing bloc of merchants think the numbers are hollow. In mid-September, retail heavyweights — including groups representing Walmart, the National Retail Federation and the Retail Industry Leaders Association — pressed their objections. Their lawyer put it bluntly: merchants would rather take the case to trial and risk losing than be bound by these terms.
By the numbers:
- The headline figure is roughly $200 billion in claimed merchant value, spread over about eight years.
- The revised deal would cut interchange by just 0.1 percentage points for five years — the sliver retailers argue is far too small.
- US District Judge Brian Cogan heard arguments on 27 April 2026 and, months later, still had not issued a final ruling.
Read that middle figure again. A tenth of a percentage point, for five years, is the concession at the centre of a settlement two decades in the making. Small wonder the biggest merchants would rather roll the dice at trial. The deeper objection is structural: a class settlement trades away the right of individual retailers to keep negotiating, and the largest players believe their own leverage is worth more than a share of an average.
The Australian approach: a date on the calendar
Now look south. Rather than spend twenty years litigating the price of acceptance, the Reserve Bank of Australia simply rewrote the rules — and the biggest changes take effect on 1 October 2026, 11 days from this edition.
From that date, businesses can no longer surcharge customers on eftpos, Mastercard or Visa debit, prepaid and credit cards. At the same moment, the RBA is cutting the interchange caps baked into every transaction, so the underlying cost of acceptance falls as the surcharge line disappears from receipts.
By the numbers:
- Australians currently pay an estimated $1.6 billion a year in card surcharges — all of it removed from 1 October.
- Lower interchange caps are projected to save merchants around $910 million a year, with the biggest proportional gains flowing to small businesses.
- A second wave lands on 1 April 2027, with caps on foreign-issued card interchange and new fee-transparency rules for schemes and large acquirers.
Two philosophies, one lesson
The contrast is not about which country cares more; it is about mechanism. The US route runs cost reform through the courts, where every basis point is contested, appeals stretch for years, and the largest merchants can hold out for a better individual deal. The Australian route runs it through the central bank’s payments mandate, where a regulator sets a cap and the market adjusts to a fixed date.
Each has trade-offs. Litigation can, in theory, extract concessions tailored to the parties and tested by adversarial pressure — but it is glacial, and the delay is itself a cost merchants bear every day the old fees keep running. Regulation is fast and universal, but it puts enormous weight on the regulator getting the calibration right; set interchange caps too low and issuers may claw the difference back through annual fees or thinner rewards, quietly shifting the cost rather than removing it. Neither model makes the cost of moving money vanish. Both are really arguments about who should decide how that cost is shared.
There is a competitive-tension angle worth flagging, too. Part of what makes the US fight so bitter is that Visa and Mastercard sit at the centre of a market with few real alternatives, so merchants have little choice but to accept whatever emerges. Australia has spent years trying to keep a domestic option — eftpos — viable precisely so the regulator is not the only counterweight. The surcharge reforms lean heavily on least-cost routing, which only works if there is a genuinely cheaper network to route to. Kill the alternative and you are back to negotiating with a duopoly, in court or otherwise.
What Australian merchants should do this week
The immediate to-do list is unglamorous but valuable. Confirm your terminals and online checkouts will stop applying surcharges on 1 October; a stale surcharge running into October is a compliance and trust problem, not a rounding error. Ring your acquirer and check that least-cost routing is switched on across in-store, online and mobile — with surcharging gone, that is now your single biggest lever on cost. Take down the “card surcharge applies” signage, and model whether the interchange cut leaves you better off absorbing the old fee than you expected.
The bigger takeaway is strategic. The US saga is a preview of how long and how bitter card-cost reform gets when it is left to courts and class actions. Australia has chosen the faster, blunter instrument, and businesses here get a hard date instead of an open-ended appeal. That certainty is worth something — provided everyone uses the next 11 days to be ready for it.
Know a merchant still surcharging 1.5% who thinks card-fee reform is someone else’s problem? The US has litigated it for 20 years; Australia’s version lands on 1 October. Forward this so they are ready — and share it with anyone who still believes nothing is changing.