Visa, MasterCard in $7.3B credit card settlement By Msnbc.com staff and wire Visa, MasterCard and major banks have agreed to pay $7.3 billion to millions of merchants to end a dispute over card fees. The settlement includes $6.05 billion in payments for past damages and a temporary reduction in merchat fees valued at $1.2 billion. The settlement would resolve a dispute over payments called interchange fees or "swipe" fees that merchants pay in credit card transactions. "Our decision to settle is based on our belief that MasterCard and our stakeholders are best served by an amicable resolution," said Noah Hanft, general counsel for MasterCard, which will pay $790 million toward the settlement. Although we have strong defenses to all claims, a settlement avoids years of litigation and uncertainties that are inherent in such cases. In addition to the cash payments, MasterCard will provide a rate cut of 10 basis points, or 0.1 percent, for eight months to merchants involved in the case. The law firm representing the merchants said in a statement that about 7 million merchants were represented in the settlement. Robins, Kaplan, Miller & Ciresi said the case is believed to be the largest settlement of a private antitrust case under the Sherman Act. "Over time, the reforms induced by this case and in this settlement should help reduce card-acceptance costs to merchants, which in turn, will result in lower prices for all consumers," said K. Craig Wildfang, a partner at the firm who was co-lead counsel for the plaintiffs. Rep. Peter Welch, D-Vt., who has been active in the interchange fee issue, called the settlement a "step in the right direction." "And it should send an unambiguous message to big banks and credit card companies: Stop ripping off your customers with excessive fees," he said in a statement. The Dodd-Frank financial regulation reform law established after the 2008 financial industry meltdown includes a provision authorizing the Federal Reserve to establish fair and reasonable swipe fees for debit cards. The class-action suit dates to 2005, and involves most major U.S. banks as defendants, including JPMorgan Chase, Bank of America, Citibank, Wells Fargo, Capital One and others. Merchants include grocery chains Kroger Inc. and Safeway Inc., Rite Aid Corp., QVC Inc., the National Association of Convenience stores, and a long list of other trade groups and small merchants. The Associated Press contributed to this story.