Discover Financial Services agreed to pay up to $1.225 billion to settle a class action over misclassified interchange fees. If your business accepted Discover credit card payments between 2007 and 2023, you may qualify for a share of the fund.
For 16 years, Discover quietly overcharged millions of merchants by coding consumer credit cards as commercial cards, which carry higher interchange fees. Most businesses never noticed. The overcharges accumulated into hundreds of millions of dollars. A class action lawsuit forced Discover to put $1.225 billion on the table for the merchants affected.
This is one of the largest payment processing class action settlements in US history, following the Visa and Mastercard merchant settlement that distributed over $5.5 billion to merchants under the same legal theory.
What Are Interchange Fees and What Did Discover Do Wrong?
Every time a customer pays with a credit card, the merchant pays an interchange fee: a small percentage of the transaction routed to the card-issuing bank. The rate varies by card type. Consumer credit cards carry lower interchange rates than commercial credit cards because consumer transactions are typically smaller and lower-risk.
Discover misclassified over 5 million consumer credit cards as commercial cards between 2007 and 2023. Merchants who accepted those cards paid commercial-card interchange rates on transactions that should have been priced as consumer transactions. The difference is small per transaction but compounds across millions of swipes over 16 years.
Most merchants never knew this was happening. Interchange fees appear as a line item on processing statements, but the distinction between consumer and commercial card rates is not visible at the point of sale.
Who Is Eligible to File a Claim?
The Discover interchange fees class action settlement covers three categories of class members. You qualify if your business fell into any of these roles between January 1, 2007 and December 31, 2023:
- End merchants: Any business that accepted Discover credit cards as payment for goods or services, including small businesses, online retailers, restaurants, and service providers.
- Merchant acquirers: Banks and payment processors that handled Discover card transactions on behalf of merchants.
- Payment intermediaries: Platforms including PayPal, Stripe, Square, and Shopify that processed Discover card payments for their users.
Businesses that have since closed are still eligible. Eligibility is tied to the transactions that occurred, not to whether the business is currently active. Former owners and successors in interest can file on behalf of dissolved entities.
You do not need to have received a notice. Not every eligible merchant was notified. If you believe your business qualifies based on your transaction history, file directly at the settlement website.
Exclusion and objection deadline: March 25, 2026. Claim filing deadline: May 18, 2026. Final court approval hearing: May 20, 2026. Payments issued after final approval.
The Discover settlement is one of dozens currently open. MoneyPilot checks your eligibility across all of them automatically.
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How Much Will You Receive?
There is no fixed payout per claimant. The amount depends on two variables: your Discover transaction volume during the covered period, and the total number of valid claims filed before the deadline.
| Fund range | What it means for claimants |
|---|---|
| Minimum: $540 million | Guaranteed minimum available for distribution |
| Maximum: $1.225 billion | Full fund available if total claims support it |
| Your share | Proportional to your Discover transaction volume from 2007 to 2023 |
Businesses with higher Discover transaction volumes receive proportionally larger payouts. Fewer total claims also means a larger share per claimant. Filing before the deadline is what matters most: there is no recovery for businesses that do not file.
What Documentation Do You Need to File?
You do not need detailed records to start. The claim form at discovermerchantsettlement.com can be completed with basic business information. Having documentation strengthens your claim if the administrator requests verification.
Useful documents if you have them:
- Merchant processing statements showing Discover card transaction activity
- Annual or monthly financial reports covering 2007 to 2023
- Bank statements showing merchant deposits from Discover transactions
- Transaction histories from Square, Stripe, or PayPal (available in your account dashboard)
If you do not file, your share of the fund does not get returned to you. It goes to court-approved charities under cy-pres doctrine.
You can still file. The form allows you to estimate your Discover transaction volume based on your best recollection. Filing with an estimate is always better than not filing.
How Do You File a Claim? Step by Step
- Go to discovermerchantsettlement.com to access the official claim portal
- Log in with your Claimant ID and PIN if you received a notice. If not, select the option to file without a Claimant ID.
- Enter your business details: name, contact information, and Discover transaction volume for the 2007 to 2023 period.
- Upload supporting documents if you have them: merchant statements, transaction data, financial reports.
- Submit before May 18, 2026. File early. Claim portals experience heavy traffic close to deadlines.
To file a Discover interchange fees class action settlement claim, you can also mail your form to: Discover Card Merchant Settlement, PO Box 2497, Portland OR 97208-2497. If mailing, send well before the deadline to allow for postal delays.
What Are Your Three Options as a Class Member?
| Option | What happens | Right for you? |
|---|---|---|
| File a claim | Receive your proportional share of the fund after final approval | Right for most eligible businesses |
| Opt out | Preserve your right to sue Discover independently | Only if you have a specific large-scale claim worth pursuing separately |
| Do nothing | Stay in the class, receive nothing, lose right to sue separately | Not recommended for most |
For most businesses, filing is the clear choice. There is no cost to file and no obligation to pursue additional legal action. Doing nothing means losing your recovery without gaining anything in return.
How Does This Compare to the Visa and Mastercard Settlement?
The Visa and Mastercard payment card interchange fee settlement distributed over $5.5 billion to merchants who accepted Visa and Mastercard between January 1, 2004 and January 25, 2019. The claim deadline for that settlement has passed, but it set the precedent for the legal theory now being applied to Discover.
The Discover settlement follows the same legal theory and covers a similar type of merchant. The two settlements are completely independent. Qualifying for one has no effect on eligibility for the other.
If you missed earlier settlement deadlines, the pattern repeats with every new case. The only way to collect your share is to file before the window closes.
What About the Capital One Acquisition of Discover?
Capital One completed its $35.3 billion acquisition of Discover Financial Services in May 2025. Capital One is now migrating debit card transactions from the Mastercard network to the Discover network. This restructuring does not affect the existing settlement obligations.
The settlement covers overcharging from 2007 to 2023 and is not affected by the acquisition. Discover has already agreed to pay. The only variable now is how many eligible merchants file before the deadline.
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Frequently Asked Questions
Who qualifies for the Discover interchange fees settlement?
Any business that accepted or processed Discover credit card payments as an end merchant, merchant acquirer, or payment intermediary (Stripe, Square, PayPal, Shopify, etc.) between January 1, 2007 and December 31, 2023 qualifies.
What is the deadline to file a Discover settlement claim?
The claim deadline is May 18, 2026. The final approval hearing is scheduled for May 20, 2026. Payments will be issued after final approval.
How much will I get from the Discover settlement?
The total fund is between $540 million and $1.225 billion. Your individual payout is proportional to your Discover transaction volume during the 2007-2023 covered period and the total number of valid claims filed.
Do I need proof to file a Discover settlement claim?
No. You can file with basic business information at discovermerchantsettlement.com. Having merchant processing statements helps but is not required to start a claim.
Can I file if my business has closed?
Yes. Eligibility is tied to transactions that occurred during the covered period, not to whether the business is currently active. Former owners and successors in interest can file.
Where do I file a Discover interchange settlement claim?
File online at discovermerchantsettlement.com or by mail to: Discover Card Merchant Settlement, PO Box 2497, Portland OR 97208-2497.
Disclaimer: MoneyPilot is not a law firm and does not provide legal advice. Settlement eligibility and payout amounts are determined by courts and settlement administrators. This article is for informational purposes only. For official claim information, visit discovermerchantsettlement.com.