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Insights and Expertise

The newest card Most materially, the card brands would repeal their com-
petitive cards rule. The competitive card rules are appli-
brand litigation cable across both card brands and require that if another
card network (think American Express or Discover) has (1)
a higher cost of acceptance than the card brand or (2) lim-
settlement: Is it its a merchant's ability to surcharge credit cards, then the
merchant must surcharge the card brand only in the same
way as the competing card brand allows surcharging.
worth settling for? This rule effectively serves to limit a merchant's ability to

surcharge, as American Express happens to have a higher
cost of acceptance than the card brands and also required
equal treatment of all its cards until recently (publicly
available American Express rules accessible to the author
no longer contain the rule requiring merchants to sur-
charge all cards the same way).

However, the American Express website conspicuously
states "[s]urcharging is not applicable for card payments
made in the US." Thus, a merchant must choose between
surcharging the card brands and accepting American Ex-
press.

Thus, while the proposed settlement would lower Mas-
tercard's surcharge cap, it would likely make surcharging
easier for merchants. Considering these new rules, mer-
chants not yet surcharging may want to evaluate the vi-
ability of surcharging for their business model. Merchants
already surcharging should ensure they do not surcharge
above allowable levels if these new rules are rolled out.
By Jessica Walsh
Global Legal Law Firm Updated honor-all-cards rule
According to Judge Cogan, "the central relief offered by
fter a cold rejection of their settlement pro- the [Proposed] Settlement is repeal of the Honor All Cards
posal in In re Payment Card Interchange Fee and rule." The honor-all-cards rule ensures that merchants ac-
Merchant Discount Antitrust Litigation in June cept every card presented for payment. Currently, the only
A 2024, the card brands Visa and Mastercard (the stated exception to the honor-all-cards rule is that mer-
card brands) have just cleared a substantial hurdle to their chants can choose whether to accept credit cards, debit
newest proposed settlement (the proposed settlement). cards, both or neither.

On June 9, 2026, Judge Brian Cogan of the United States The proposed settlement would break down credit cards
District Court for the Eastern District of New York granted into three categories: (1) standard consumer cards, (2) pre-
preliminary approval for the proposed settlement, clear- mium consumer cards, and (3) commercial cards. In the
ing the way for the court to grant final approval. way that a merchant currently must disclose to the card
brands whether it intends to surcharge, the proposed set-
The proposed settlement makes several changes to the tlement would require the merchant to inform its acquirer
card brand rules related to surcharging, cash discount- and the card brands that it will no longer honor all cards.
ing, and the honor-all-cards rule, among others (the card
brand rules). However, despite the multiple updates prom- While modifications to the honor-all-cards rule provide
ised, merchants might not see as much of a change as the merchants another potential avenue to avoid high-fee
District Court envisions. cards, the author predicts that merchants will not readily

Changes to surcharging rules start dishonoring cards. First, merchants that do not ac-
cept all cards will potentially cut into the amount of busi-
The biggest and most meaningful change in merchants' ness they receive, which would result in reduced profit.
eyes is likely to be the card brands' surcharging rules.
Currently, Visa allows surcharging at 3 percent and Mas- Additionally, merchants may have a hard time differenti-
tercard allows surcharging at 4 percent. If the proposed ating the cards they accept and the ones they do not.
settlement went into effect, both card brands would allow
a maximum surcharge of 3 percent.
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