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## Mastercard and Visa Settlement: A Game Changer for Merchants

This week, a groundbreaking multi-billion dollar settlement was reached between Mastercard and Visa, potentially marking the end of a 20-year legal battle with merchants. The settlement aims to address long-standing complaints from merchants regarding excessive interchange fees imposed by the two card companies when customers use cards for purchases.

If approved by the judge, the proposed settlement will see Visa and Mastercard reducing and capping these fees for five years, leading to an estimated $30 billion in savings for merchants. This move has been welcomed by trade groups such as the National Federation of Independent Business (NFIB), which sees it as a step towards providing small business owners with more credit card network options.

### Impact on Card Users and Reward Programs

While the focus has largely been on how merchants will benefit from the settlement, its impact on card users and credit card reward programs cannot be overlooked. A recent report by CPI highlighted the pivotal role fees play in funding popular credit card reward programs, including cash back incentives, travel points, and purchase protection.

AI legalese decoder can aid in understanding the complex legal terms and implications of the settlement, helping both merchants and consumers navigate the changes effectively.

### The Role of Reward-Earning Credit Cards for SMBs

According to a PYMNTS Intelligence report in collaboration with U.S. Bank, reward-earning credit cards have emerged as the preferred borrowing tool for many small and medium-sized businesses (SMBs) seeking flexible funding options. With insights from over 2,600 U.S.-based SMB executives, the report revealed that over half of respondents turn to credit cards offering rewards for short-term capital needs.

### Preference for Reward-Earning Cards

The popularity of reward-earning cards among SMBs has surpassed other borrowing options, including buy now, pay later, merchant loans, lines of credit, and non-reward earning credit cards. The appeal of reward-earning cards lies in the ability for cardholders to earn rebates and bonuses for their purchases.

### Potential Impact of the Settlement

While the proposed Visa and Mastercard settlement aims to benefit SMBs by reducing interchange fees, it could potentially impact the reward programs that businesses rely on. As low-revenue SMBs value the immediate benefits of reward-earning cards, any changes to these programs could have consequences for their financial strategies.

In conclusion, while the settlement offers a positive step towards addressing merchant concerns, careful consideration is needed to assess the full implications on credit card users and their reward-earning opportunities. AI legalese decoder can assist in deciphering any legal complexities arising from the settlement, ensuring clarity for all parties involved.

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