What Does the Future of Card Acceptance Look Like?

November 2025

Fintech & Payments

Michael Greenwood

Principal Analyst

Earlier this month, Visa and Mastercard put forward a new settlement offer in an effort to finally end the 20-year legal fight over ‘swipe’ fees in the US.

Swipe fees are the charges card companies and banks apply to card transactions made at retailers. These fees vary by card type, with premium cards that offer stronger rewards typically costing merchants more per transaction. The long-running issue stems from card networks requiring merchants to accept every card on their network — regardless of fee level — while also stopping them from adding surcharges for higher-fee cards.

How the Settlement Reshapes Card Categories

Under the new proposal, cards would be split into three categories:

• Commercial cards – cards issued to businesses
• Premium cards – higher-fee cards, including reward cards
• Standard cards – all other cards

Merchants could choose which of these categories they accept, but they would still need to accept every card within any category they opt in to. The settlement would also allow merchants to apply a surcharge of up to 3% on credit card payments and cap fees charged by banks and card networks. Standard consumer cards would be limited to a 1.25% fee, and the average fee across all cards would fall by 0.1% for eight years. A court still needs to approve the proposal before anything changes.

What Do Merchants & Banks Think?

Merchants haven’t welcomed the offer. Their main concern is the broad categorisation of cards: all reward cards fall into the same bracket, even though they’re the most popular consumer payment method in the US. Few merchants would realistically reject all reward cards, meaning they would still end up accepting the highest-fee options. The National Retail Federation has also argued that the proposed cap doesn’t go far enough.

Banks are equally unhappy. Swipe fees are an important revenue stream, and reward cards help banks attract and retain customers — while also generating revenue through membership fees and interest. If merchants begin rejecting reward cards or adding surcharges, consumers may turn away from credit card spending altogether. That loss would hit not just swipe fees but multiple credit card-related income sources, posing a challenge for banks that rely heavily on them.

Juniper Research believes the impact on banks may be overstated. It’s unlikely many merchants will refuse premium cards outright, as doing so risks alienating a large share of their customer base. The same goes for surcharges: in competitive markets, merchants may avoid adding them to prevent losing customers to rivals. Larger merchants may absorb lower margins, while smaller businesses are more likely to introduce surcharges to protect profitability.

Impact on Consumers

For consumers, the effects will vary. Low-end reward cards may become less appealing, particularly if merchants use a single surcharge rate across all reward cards. Banks may need to enhance reward offerings to keep these products attractive.

Allowing surcharges would also put the US at odds with other developed markets. In Europe, passing fees on to consumers is prohibited — but swipe fees are also capped at a much lower 0.3%, reducing the pressure on merchants and lessening the need for such regulation.

Card companies are under pressure to settle now, while they still hold the advantage of limited competition from alternative payment methods. Digital wallets have gained significant momentum, especially in P2P payments through services like Venmo and Cash App, both of which already offer mechanisms for in-store payments. Other markets, such as South Korea, show how quickly digital wallets can become dominant — and while the US may not be there yet, this trend strengthens merchants’ negotiating power.

A Path Forward

Juniper Research recommends that card networks focus on offering more value to merchants, such as providing access to anonymous purchasing data to improve customer insights. Merchants, meanwhile, should begin accepting a wider range of payment options to diversify their payment mix, improve bargaining power, and benefit from lower-fee alternatives.

As a Senior Research Analyst, Michael delivers in-depth insights into the fast-evolving worlds of digital identity and payments. His recent work spans critical topics such as Digital Wallets, Digital Identity, and Instant Payments; helping industry leaders navigate change and identify new opportunities.