Lykkers, every tap of your card sets off a tiny tug-of-war you never see. Retailers pay fees, banks collect them, and a slice of that money helps fund your cashback, miles, and lounge perks.

Now, after a long-running dispute between merchants and card networks, that money flow is shifting—and your rewards could be next.

Swipe Fees 101

Whenever you pay with a credit card, the store sends a portion of the sale—often around 1% to 3%—to the payment system behind the transaction. Part of that fee compensates the network such as Visa or Mastercard; another part goes to the bank that issued your card. Cards loaded with perks usually cost merchants more per transaction, which is why premium cards can be more expensive for retailers to accept.

Over time, rewards cards have taken over. Rewards cards now account for most credit-card purchase volume in many markets, so the total processing-fee bill for merchants has surged.

The New Settlement

The recent agreement grew out of a lawsuit first filed in 2005 by merchants who argued that network rules were too restrictive and expensive. Under the deal—still awaiting approval from a federal court—average fees would fall by about 0.1 percentage point for five years, and standard transactions would face a temporary cap on processing rates.

On a single $50 grocery purchase, that saving is only a few cents. But scale it across a national chain processing billions of dollars annually, and it can translate into millions in reduced costs.

More Choice For Stores

The more disruptive part of the settlement isn’t the modest fee cut—it’s the new flexibility for merchants.

Historically, if a shop accepted one network’s logo, it had to accept every card on that network, from basic no-fee cards to ultra-premium ones. Under the new framework, stores could accept some cards while declining the most expensive tiers. They may also have wider scope to add surcharges when customers choose particularly costly cards.

Some businesses already add a fee for certain cards; larger chains could quietly adopt similar tactics or create checkout incentives that steer customers toward lower-cost options.

Carrot, Not Stick

Retailers know that angry customers abandon carts, both online and in-store. So instead of simply refusing cards, many may try “carrot” strategies, nudging you toward cheaper options.

A store might offer an extra checkout discount if you use a specific co-branded card. Another merchant could promote a particular network by offering extra loyalty points on those transactions. These deals let retailers trim costs without creating the frustration of seeing “card not accepted” on the terminal.

Will Shoppers Notice?

From a customer’s perspective, the impact may feel subtle. Most retailers want payments to stay smooth, fast, and friction-free, so they’re unlikely to adopt policies that cause obvious annoyance.

Many of the changes will likely happen in the background—quiet card preferences, small incentives, or behind-the-scenes routing choices. For everyday shoppers, the experience may look the same, even while the economics underneath are shifting.

Why Rewards May Shrink

Banks use interchange revenue to fund reward programs: cashback, points multipliers, travel credits, and lounge access. If fee income falls even slightly, card issuers may re-evaluate how generous their perks can be.

Jose Aurazo, an economist, writes that higher interchange fees make cards more attractive to shoppers, while lower fees make acceptance cheaper for merchants.

Possible adjustments include:

• lower earn rates in popular categories like dining or online shopping

• tighter caps on bonus spending

• trimming high-cost extras such as premium travel services or insurance benefits

The goal for issuers is simple—protect profit without sparking a customer backlash.

Quiet Term Tweaks

Rather than slashing headline rewards overnight, issuers are more likely to make gradual adjustments that most cardholders barely notice. That might mean removing concierge services, adding more restrictions to travel redemptions, or ending fee-free foreign currency transactions on certain cards.

Because reward structures are already complex—rotating bonus categories, partner offers, limited-time discounts—small downgrades can easily fly under the radar. Only cardholders who regularly review terms and track their points closely are likely to spot every change.

Protecting Your Perks

In this shifting landscape, the smartest move is to be intentional with your cards. Review where your money goes each month: groceries, travel, transport, subscriptions, or online shopping. Choose a primary card that rewards your top categories at a meaningful rate, ideally 2%–5% back or equivalent points value.

Weigh any annual fee against realistic rewards. A $95 annual-fee card should comfortably return more than that in benefits for your actual spending patterns. Keep at least one no-fee backup card with broad acceptance, so you’re covered if a store ever discourages or excludes your premium card.

Conclusion

Behind every tap, banks, card networks, and retailers are quietly renegotiating who gets what. Lower fees and new acceptance rules may gradually reshape which cards merchants prefer and how generous reward programs remain.

For cardholders, awareness is the best defense: watch for quiet changes, compare your cards once or twice a year, and make sure each one still earns its place in your wallet. If your favorite card started giving you less value tomorrow, would you notice—and would you be ready to switch?