Key Takeaways
- Visa (V) and Mastercard (MA) are reportedly nearing a significant settlement with U.S. merchants, aiming to resolve a decades-long antitrust dispute over interchange ("swipe") fees, which could lower costs for retailers and grant them more flexibility in card acceptance.
- This potential agreement follows a separate October 2025 settlement where Visa and Mastercard agreed to pay $199.5 million to resolve claims that they unfairly burdened merchants with liability for rejected credit card transactions.
- Large corporations face a potential roadblock to fully realizing the benefits of the 2017 Trump tax cuts, as ongoing Democratic proposals, including President Biden's 2025 budget, advocate for raising the corporate tax rate from the current 21% to 28%, which could curtail future shareholder payouts.
- The proposed Democratic tax hikes aim to reverse some aspects of the 2017 Tax Cuts and Jobs Act (TCJA), which significantly reduced the corporate tax rate from 35% to 21% and contributed to record corporate profits and increased shareholder distributions.
U.S. businesses are navigating a dynamic financial landscape marked by significant legal resolutions in the payment processing industry and persistent uncertainty surrounding corporate tax policy. Two major developments are poised to reshape operational costs for retailers and influence corporate financial strategies heading into 2026.
Visa and Mastercard Near Landmark Merchant Settlement
Visa (V) and Mastercard (MA) are reportedly close to finalizing a comprehensive settlement with merchants, aiming to conclude a legal battle spanning two decades over interchange fees, commonly known as "swipe fees." This anticipated agreement is expected to reduce the fees stores pay for accepting credit card transactions and provide merchants with greater autonomy to reject certain credit cards, according to sources familiar with the matter.
This development follows a separate, recently announced October 2025 settlement where Visa and Mastercard agreed to pay a combined $199.5 million. This particular class-action lawsuit, initiated in 2016, alleged that the card networks illegally shifted liability for rejected credit card transactions to merchants, particularly those who had not upgraded to chip-enabled payment systems. Earlier in the same case, American Express and Discover Financial had reached a separate agreement, paying $32.2 million to the plaintiffs.
These settlements are distinct from a previous $5.54 billion antitrust settlement approved in 2019 concerning excessive interchange fees, for which an initial partial distribution to eligible claimants was approved in October 2025 and is expected in early 2026. While a March 2024 settlement aimed at reducing swipe fees by an estimated $30 billion over five years was ultimately rejected by a U.S. District Judge in June 2024 for not going far enough, the current negotiations suggest a renewed effort to address these long-standing merchant grievances.
Corporate Tax Policy: A Roadblock to Full Trump-Era Benefits
Meanwhile, large corporations are facing potential headwinds regarding the sustained benefits of the 2017 Tax Cuts and Jobs Act (TCJA). The TCJA, enacted under the Trump administration, permanently reduced the corporate tax rate from 35% to 21%, leading to significant increases in corporate profits and shareholder payouts through dividends and stock buybacks.
However, Democratic lawmakers, including President Biden, have consistently advocated for reversing some of these cuts. President Biden's 2025 budget proposal aims to increase the corporate tax rate to 28% and raise the corporate minimum tax for companies with billions in earnings from 15% to 21%. These proposed tax hikes are seen by some as a "roadblock" to companies fully leveraging the lower tax rates established by the TCJA, potentially impacting future distributions to shareholders.
The debate over corporate tax policy remains a central theme in Washington. While proponents of higher corporate taxes argue for increased revenue and a fairer tax system, critics contend that such increases could hinder investment and economic growth. The ongoing political discussions suggest that the future of corporate tax rates and their impact on business payouts will remain a key focus for financial markets.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.