1. The Payouts Are Often Modest for Small Businesses

Though the overall settlement fund is substantial, amounting to around $5.54 billion after administrative deductions, the amount each individual business receives depends on their transaction volume from 2004 to 2019. Small and medium-sized businesses typically see only modest payments, sometimes just a few hundred dollars. The lower your total card transactions, the smaller your settlement, which often doesn’t come close to offsetting the years of fees paid.

For many businesses, the time and resources required to file a claim may outweigh the financial benefit they receive. A small payout may feel more like a token reimbursement rather than genuine compensation for years of inflated fees.

2. Time-Consuming Documentation Requirements

To file a claim, businesses need documentation of their credit card transactions dating back years. This can be a labor-intensive task, especially for small business owners who may lack easy access to older records. The process requires businesses to dig into their past payment data and fill out forms, which may be daunting, particularly when the end result could be a minimal payout.

For businesses with limited resources, the time spent on this paperwork could be more valuable when used in other areas of the business, like customer service or sales. The effort required can be off-putting, especially when considering that the potential payout may barely make an impact on the business's finances.

3. Deductions and Fees Reduce the Final Amount

The settlement amount is further reduced by administrative fees, legal expenses, and costs associated with processing the claims. This means that the final payout pool is smaller than it might appear at first. Some businesses also choose to go through third-party services that offer to handle the paperwork for a fee, which further reduces their final payment.

When businesses see the net amount they’re left with after all the deductions, it often falls short of expectations. This limited payout may not feel worth the hassle, especially when the effort to secure it could be channeled into cost-saving measures or revenue-generating activities instead.

4. A One-Time Payment That Doesn’t Address Ongoing Fees

For many businesses, the larger issue lies in the ongoing costs of interchange fees, not the past fees covered by this settlement. While the payout provides a small form of relief, it doesn’t address the continuous financial burden of card processing fees. The settlement is a one-time payment, and it doesn’t offer any future reduction in fees or guarantee protection from high rates moving forward.

Businesses looking for long-term solutions may find more value in negotiating better processing terms with their merchant services provider or exploring alternatives. With strategic cost management, businesses can achieve consistent savings that go beyond a one-time check from this settlement.

5. Exploring Alternative Solutions May Be More Effective

For business owners frustrated with high processing fees, re-evaluating their payment processing setup may provide more significant, long-term savings than a settlement payout. By working with a merchant services provider that offers transparent, competitive rates, small businesses can find ways to reduce transaction costs over time without relying on a one-time settlement.

This can include switching providers, negotiating interchange rates, or implementing strategies to reduce chargebacks and other fees. Many providers offer better deals for small businesses than those that were available years ago, meaning that exploring these options could be more financially beneficial than relying on the outcome of a class-action settlement.

Final Verdict: Limited Relief for Most Businesses

While the Payment Card Interchange Fee Settlement may sound appealing, the reality is that most small businesses won’t see a significant financial impact from their payouts. For many, the modest compensation isn’t worth the time and effort required to submit a claim. If you’re a small business owner looking to lower payment processing costs, it might be more productive to focus on proactive measures like finding a merchant services partner with more competitive terms, rather than spending resources on a settlement payout.

In the end, while the settlement represents a step toward addressing high fees, the limited payouts may leave small businesses looking for more sustainable and impactful solutions. For most, the time and energy involved simply may not be worth the modest returns.