Every credit card sale at The Pizza Standard ends with less money reaching the business than the customer authorized. An issuing bank keeps an interchange fee, Visa or Mastercard receives network fees, and the merchant’s payment provider takes a markup. That deduction is ordinary in card payments. The new lawsuit says the price-setting machinery behind it is not.

The Pizza Standard LLC, a San Diego business that says it began accepting Visa and Mastercard cards in 2021, filed the complaint against the two networks and bank-affiliated defendants including Bank of America, Capital One, Chase, Citi, JPMorgan Chase, Paymentech and Wells Fargo.

Its core allegation is that default interchange schedules are protected by a web of rules that deprives merchants of the tools buyers normally use to force prices down. A merchant allegedly cannot freely reject an expensive premium card, charge enough to reflect its cost, route the payment over another network, or offer an issuer-specific incentive without running into network restrictions.

The networks and banks have not been found liable in this case. No answer, denial or other response to this complaint was included in the supplied material.

A card payment crosses four businesses in seconds

A credit card transaction can feel instantaneous at the register, but the authorization travels through several institutions. The complaint describes the merchant as the direct purchaser of card-acceptance services because the disputed fees are deducted from money owed to the merchant.

The overall merchant discount, often called the swipe fee, contains three main pieces. The complaint says interchange is generally the largest. It goes to the bank that issued the card. Separate network fees go to Visa or Mastercard, while an acquirer markup compensates the merchant’s payment provider.

Six rules allegedly close off the exits

The lawsuit argues that no single rule needs to do all the work. Instead, the rules reinforce one another. A merchant that cannot reject a costly card, clearly price its extra cost or route around the network has little leverage to demand a lower fee, the plaintiff contends.

The alleged feedback loop starts with the Honor All Cards rule. If a merchant wants access to customers using an ordinary Visa card, it must also take more expensive Visa products. Issuing banks therefore do not need to lower merchant fees to secure acceptance of their individual cards, according to the complaint.

Surcharge and discount restrictions allegedly remove a second competitive signal. The customer chooses the card, but the merchant bears the acceptance cost. If the merchant cannot show that cost at checkout, the cardholder has little reason to choose a cheaper payment method.

Market power makes the rules matter

Restrictions do not necessarily eliminate competition if customers can easily walk away. The complaint says merchants cannot. Visa and Mastercard are described as must-have networks because rejecting either could mean losing customers who rely on its cards.

The complaint also points to concentration on both sides of the system. It says the five largest issuers handled 69% of credit card purchase volume in 2024, while five merchant acquirers processed about 80% of Visa and Mastercard transaction volume.

Those figures support the plaintiff’s theory of bargaining power, but they do not answer the ultimate legal questions. The court would still have to determine whether the challenged agreements exist as alleged, whether they unreasonably restrain competition, and whether they caused measurable overcharges to members of the proposed class.

The networks changed ownership, but the rules remained

Visa and Mastercard began as associations owned and operated by member banks. Those competing banks collectively approved default interchange schedules before Mastercard’s 2006 public offering and Visa’s 2008 public offering.

The complaint alleges that the public restructurings were designed partly to reduce antitrust exposure without disrupting interchange revenue. It cites communications in which Mastercard allegedly assured Capital One there would be “little to no change” in interchange policy and satisfied Citi bankers that it would have “the same objective, pre and post” public offering.

It also quotes a draft assurance from Visa’s head of global interchange stating that although the directors considering interchange decisions might change, the process for developing and deploying interchange changes would remain largely the same.

The lawsuit is built around a settlement gap

Merchants have challenged payment card rules for more than two decades. The new complaint focuses on businesses that allegedly fell outside the monetary relief produced by the earlier litigation.

The Pizza Standard says it first accepted Visa and Mastercard in 2021. It therefore claims it did not belong to the older damages class and did not release its claims. The proposed new class covers United States merchants that accepted the networks’ credit cards from January 25, 2019 until the alleged anticompetitive effects cease, excluding claims that were lawfully released.

That last qualification matters. The older settlement release extends beyond the class period for merchants who were members of that settlement. The new complaint attempts to represent merchants whose claims remain available, but the court has not certified that class or determined who belongs in it.

Prospective reforms do not answer the damages claim

The amended equitable settlement described in the complaint could change several rules if it receives final approval. Its relief would begin 90 days after final approval and operate prospectively. The new lawsuit argues that such changes do not compensate merchants for earlier fees.

Agreeing to prospective rule changes does not itself prove an antitrust violation. The complaint argues that the feasibility of those reforms weakens any claim that the existing restrictions are indispensable to operating the networks. That argument still must be tested against the defendants’ evidence and legal defenses.

Other countries are the plaintiff’s test cases

The complaint points abroad to argue that payment networks can survive lower interchange rates and greater merchant choice. It cites European caps of 0.3% for credit card interchange, Australian reforms that reduced average domestic interchange from about 0.95% to roughly 0.50%, and New Zealand rules allowing merchants to surcharge by network, product or issuer.

According to the complaint, card issuance and transaction volume continued growing after the Australian reforms, while a New Zealand regulator later estimated that retailers had saved more than $70 million in interchange fees. These comparisons support the plaintiff’s case, but national payment markets and regulatory systems are not necessarily identical. The defendants would have an opportunity to contest whether the comparisons establish what would happen in the United States.

The immediate burden falls on merchants

The complaint treats interchange and network charges as direct business expenses. It says issuing banks record interchange as revenue, merchants record the charges as expenses, and acquiring banks generally treat interchange as a pass-through deduction rather than their own expense.

For an individual restaurant or shop, that means the cost arrives transaction by transaction. The proposed class claims each payment processed under the challenged rules creates a new overcharge. Yet the complaint does not disclose The Pizza Standard’s total card fees, estimate its individual overcharge or calculate class-wide damages.

It also does not establish how much of any merchant cost is absorbed through lower margins, reflected in prices, or offset by benefits associated with accepting credit. Those economic questions could become central if the case reaches class certification and damages analysis.

What the plaintiff wants

The complaint contains 84 federal and state counts. It invokes the Sherman Act, state antitrust statutes and several state consumer-protection laws. The plaintiff asks the court to certify a nationwide class, appoint class counsel, find the defendants liable and award the forms of damages available under the relevant laws, including treble damages where permitted.

None of that relief has been granted. At the complaint stage, the filing presents one side’s account of the payment system and begins the process of testing whether those allegations can survive legal challenges and be proven with evidence.

The real contest is over who gets to set the price

Visa and Mastercard describe interchange rates as defaults. The Pizza Standard’s case turns on whether merchants have a realistic way to escape those defaults. If every practical route to reject, reroute or price a costly card is blocked, the plaintiff argues, the default operates less like a starting point and more like a compulsory toll.

That theory remains unproven. But it identifies the question beneath every tap: when a merchant pays to access the country’s dominant credit card networks, is the fee disciplined by competition, or protected from it by the rules of entry?