Visa, Mastercard fee settlement may impact credit card rewards

Visa (V) and Mastercard (MA) have reached a settlement that will lower merchant swipe fees for card transactions. The settlement resolves antitrust claims that businesses were paying unfairly high fees to these companies when consumers swiped their cards.

Yahoo Finance's Molly Moorhead breaks down the details, analyzing what this may mean for cardholders moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video transcript

- Yahoo Finance's executive editor Brian Sozzi spoke to Robinhood CEO Vlad Tenev earlier today about the company's new credit card and how they feel about playing in the same market with Giants like Amex, Visa, and Mastercard. Here is what he had to say.

VLAD TENEV: We didn't want to just come out with a me-too product. We wanted to differentiate on rewards. We wanted to differentiate on user experience. And, of course, the design. And I think we've been able to do that in all three categories. The rewards, I believe, are the best in the industry. Nothing can compare. Ah, the design and the user experience-- the digital experience-- I think we're very proud.

The team is very proud of what we've built. We really have, you know, not just business people and technologists at Robinhood, but we have great artists too. And I think we've made what-- what I believe is the most iconic card on the market.

- And it's not just Robinhood. The credit card space getting a lot of attention this week as Visa and Mastercard reach a settlement with merchants over swipe fees in a legal case that's expected to save businesses $30 billion in fees. Let's bring in Yahoo Finance's Molly Morehead to give us all the details on this-- a landmark settlement, we should say--

MOLLY MOORHEAD: Yes.

- As well, here.

MOLLY MOORHEAD: The case has been dragging on for decades. And it settles the, um, antitrust claims over, um, businesses saying that-- that Visa Mastercard and their partner banks are charging unfair fees, and this is the-- this is the 2% to 4% transaction fee that businesses pay the credit cards every time we swipe our card--

- Right.

MOLLY MOORHEAD: In a transaction. And, um, it should save money in particular, for small businesses that it's harder for them to absorb that fee. Um, but what we're going to be looking at is how this might potentially affect cardholders, right? Because, uh, in particular rewards cards which carry those really nice, valuable benefits and perks have-- typically have higher swipe fees. And so, is this going to change that formula? Is it going to affect what kind of rewards are offered? That's what we're going to be watching.