Discover a $1.2 Billion Merchant Settlement: File Your Claim

For seventeen years, Discover quietly overcharged millions of merchants by misclassifying consumer credit cards as commercial cards, which carry higher interchange fees. The result? Companies – many of them small, family-owned businesses – paid about 1% more than they should have for each Discover transaction involved. Now a $1.225 billion settlement gives those traders a chance to get some of that money back.

If you’re a business owner dealing with debt, this is real money you may still owe. Here’s what happened, who is eligible and how to make your claim.

Math doesn’t lie. For seventeen years, the math was rigged against traders – and most of them had no idea.–Steve Rhode

What Discover did: the 17-year overload

According to the FDIC Enforcement ActionAs of mid-2007, Discover’s card processing system incorrectly classified certain consumer credit cards as commercial credit cards. This was not a trivial accounting error; it had a direct impact on what sellers paid.

This is why it’s important:

Commercial cards carry higher interchange fees because they are designed for business purchases with enhanced reporting features. Consumer cards – the cards you and I carry in our wallets – should be processed at lower rates. By incorrectly labeling consumer cards as commercial, Discover charged merchants the higher rate for transactions that should have been cheaper.

According to American bankermore than 5 million cards were misclassified in the period from January 1, 2007 to December 31, 2023. That means 17 years of additional costs resulting from every swipe, dip and tap on those cards.

The settlement: $1.225 billion

The class action case – CAPP Inc. et al. v. Discover Bank et al.No. 1:23-CV-4676, filed in the Northern District of Illinois – resulted in a settlement of up to $1.225 billion plus interest, according to the official settlement website.

These are the most important figures:

The court granted preliminary approval on October 9, 2025. After attorneys’ fees and administrative costs, the guaranteed minimum benefit to class members is $540 million. Each eligible class member will receive a minimum of $10, according to the settlement notice.

Regulatory fines: another $250 million

The class action settlement isn’t the only fallout Discover faced. Federal regulators have imposed separate sanctions, as detailed in the The FDIC press release:

• F.D.I.C.: A fine of $150 million plus $1.225 billion in restitution
• Federal Reserve: A civil penalty of $100 million
• Total legal fines: $250 million on top of the settlement

When two federal agencies fine you a quarter of a billion dollars, the magnitude of the problem becomes clear to you.

Who is eligible for the settlement

According to the official settlement place And Top class actionsthe following parties are eligible:

• Merchants (businesses or individuals) who accepted Discover credit card transactions between January 1, 2007 and December 31, 2023
• Merchant acquirers (companies that process card payments for companies)
• Payment intermediaries who processed Discover credit card transactions during the class period

Important deadlines

How to make your claim

According to KY3 coveragethe claims process does not initially require detailed transaction data. This is what you need to do:

• Visit Discovermerchantsettlement.com
• Complete the claim form with your company details
• You do NOT need detailed transaction information to submit your claim
• You can also call 1-888-655-3176 for help

Your three options

As a class member you have three choices. I’m going to give you all the information so you can make an informed decision that’s right for your situation:

Option 3: do nothing. If you do nothing, you will remain in the class but will not receive payment. You also give up the right to sue Discover for these matters. For most people this is the worst option.

The Capital One Connection: Why This Matters Going Forward

There’s a bigger story here. Capital One completed its $35.3 billion acquisition of Discover in May 2025 American banker. Capital One is now migrating its debit card transactions from the Mastercard network to the Discover network.

Why is that important for traders? The Discover Network is exempt from the Durbin Amendment interchange fee limits applicable to Visa and Mastercard. That means Capital One’s debit transactions on the Discover network could cost merchants significantly more — potentially an additional $1 billion in debit fees across the industry, a concern raised by Senator Elizabeth Warren.

The Visa/Mastercard settlement context

This Discover settlement is in addition to the separate – and much larger – $38 billion Visa/Mastercard merchant settlement fee, which is facing opposition of its own. In that case, the first payments from a previous partial distribution are expected to start in February 2026. If you are a merchant, you may be eligible for both settlements.

What this means if you’re dealing with debt

If you’re a small business owner struggling with debt, here’s what you need to understand: Interchange fees are one of the biggest hidden costs of running a business. They eat up margins that are already thin. And for seventeen years, Discover made these charges worse through misclassified cards.

This settlement concerns money that may be owed to you. Submit the claim. Every dollar matters when you’re trying to get your business finances in order.

And if the business debt is too much for you, don’t try to do it alone for five years. Understand all your options, including the ones no one wants to talk about. Take our Find Your Path quiz to see which debt solution suits your situation.

Sources

Frequently asked questions

Who is eligible for the Discover merchant settlement?

Any merchant – whether a business or an individual – who accepted Discover credit card transactions between January 1, 2007 and December 31, 2023 is a class member, according to the official settlement notice. This also includes merchants and payment intermediaries. Even if your business is closed, you may still qualify if you accepted Discover cards during the class period.

How much money will sellers receive from the Discover settlement?

The total settlement fund is up to $1.225 billion plus interest. After attorneys’ fees and administrative costs, the guaranteed minimum benefit to class members is $540 million, according to the settlement terms. Each class member who submits a valid claim will receive a minimum of $10. Your actual payment will depend on the number of Discover transactions your company processes during the 17-year period.

How do I file a Discover merchant settlement claim?

Visit Discovermerchantsettlement.com to file your claim online, or call 1-888-655-3176 for assistance. According to KY3you do not need detailed transaction information to initially submit your claim. The deadline for submission is May 18, 2026.

What is the deadline for filing a Discover settlement claim?

The deadline for filing a claim is May 18, 2026. If you wish to opt out of the settlement and maintain your right to independently sue Discover, the deadline to self-exclude is March 25, 2026. The final approval hearing is scheduled for May 20, 2026, and payments are expected approximately 240 days after final approval – likely in early 2027.

Will the Discover settlement impact consumers who use Discover cards?

This settlement is specifically intended for merchants, not individual consumers who use Discover cards to make purchases. However, the additional costs had an indirect impact on consumers, because companies often pass on higher processing costs in higher prices. The broader concern, as reported by American bankeris that Capital One’s migration to the Discover network could lead to even higher interchange fees for merchants in the future – costs that ultimately flow downstream to consumers.