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Those who meet eligibility criteria should apply before the deadline May 18, 2026.
Open Class Actions > Discover Card Merchant Class Action
Discover Card Merchant Class Action Lawsuit
A class action lawsuit has been filed against Discover Financial Services, DFS Services LLC, and Discover Bank due to allegations that the company misclassified consumer credit cards as commercial cards, causing merchants to pay inflated interchange fees. This Discover Card Merchant class action case began in July 2023 and consolidated three lawsuits: CAPP, Inc. v. Discover, Lemmo’s Pizzeria v. Discover, and Support Animal Holdings v. Discover.
The plaintiffs—CAPP, Inc., Young Peoples Day Camps Inc., Prayus Group LLC, Lemmo’s Pizzeria, and Lennys Casita—filed the Discover Card Merchant legal claims, represented by Lieff Cabraser Heimann & Bernstein LLP, The Kick Law Firm APC, and Dilworth Paxson LLP.
The lawsuits alleged that Discover knowingly placed certain consumer cards into higher-priced commercial tiers for years, generating excessive fees from merchants and intermediaries.
After extensive discovery and mediation, the parties reached a settlement approved for preliminary review in 2025, concluding more than two years of litigation. The settlement provides $540 million to $1.225 billion plus interest for eligible merchants.
Eligible participants include End Merchants, Merchant Acquirers, and Payment Intermediaries that processed misclassified Discover transactions between 2007 and 2023.
The plaintiffs—CAPP, Inc., Young Peoples Day Camps Inc., Prayus Group LLC, Lemmo’s Pizzeria, and Lennys Casita—filed the Discover Card Merchant legal claims, represented by Lieff Cabraser Heimann & Bernstein LLP, The Kick Law Firm APC, and Dilworth Paxson LLP.
The lawsuits alleged that Discover knowingly placed certain consumer cards into higher-priced commercial tiers for years, generating excessive fees from merchants and intermediaries.
After extensive discovery and mediation, the parties reached a settlement approved for preliminary review in 2025, concluding more than two years of litigation. The settlement provides $540 million to $1.225 billion plus interest for eligible merchants.
Eligible participants include End Merchants, Merchant Acquirers, and Payment Intermediaries that processed misclassified Discover transactions between 2007 and 2023.
Lawsuit Name
CAPP, Inc. v. Discover Financial Services
Court
United States District Court for the Northern District of Illinois
Case Number
1:23-cv-04676
Judge
Hon. Steven C. Seeger
Plaintiffs
CAPP, Inc., Young Peoples Day Camps Inc., Prayus Group LLC, Lemmo’s Pizzeria LLC, Lennys Casita LLC
Defendants
Discover Financial Services, DFS Services LLC, Discover Bank
Key Allegation
Discover misclassified consumer cards as commercial, causing merchants to overpay interchange fees for years.
Discover Card Merchant Class Action Settlement - $1,225,000,000
The latest Discover Card Merchant settlement update confirms that Discover has agreed to pay $540 million to $1.225 billion plus interest to resolve claims that it misclassified consumer credit cards as commercial cards, causing merchants to pay inflated interchange fees.
Discover disclosed to regulators that it had misclassified cards and set aside $365 million as a refund liability—before lawsuits were filed. That’s extremely rare and influenced the litigation’s trajectory.
This Discover Card Merchant lawsuit settlement amount covers End Merchants, Merchant Acquirers, and Payment Intermediaries who processed misclassified Discover transactions between 2007 and 2023. Very few card-network cases cover such a long period. This is because Discover admitted in regulatory filings that misclassification began “around mid-2007,” and the settlement incorporates data all the way through the end of 2023.
Records from the case show that plaintiffs—ranging from day camps to restaurants—were all overcharged due to the same systemwide classification issue.
As part of the settlement, Discover will fund payments based on each merchant’s estimated overcharge tied to their Discover Merchant IDs (MIDs), with amounts allocated according to the settlement’s detailed methodology. Eligible businesses must submit a claim by May 18, 2026 to receive compensation.
This Discover Card Merchant settlement eligibility extends nationwide, and merchants may receive anywhere from small fixed payments to larger amounts depending on their Discover processing volume and MID-level impact.
Discover disclosed to regulators that it had misclassified cards and set aside $365 million as a refund liability—before lawsuits were filed. That’s extremely rare and influenced the litigation’s trajectory.
This Discover Card Merchant lawsuit settlement amount covers End Merchants, Merchant Acquirers, and Payment Intermediaries who processed misclassified Discover transactions between 2007 and 2023. Very few card-network cases cover such a long period. This is because Discover admitted in regulatory filings that misclassification began “around mid-2007,” and the settlement incorporates data all the way through the end of 2023.
Records from the case show that plaintiffs—ranging from day camps to restaurants—were all overcharged due to the same systemwide classification issue.
As part of the settlement, Discover will fund payments based on each merchant’s estimated overcharge tied to their Discover Merchant IDs (MIDs), with amounts allocated according to the settlement’s detailed methodology. Eligible businesses must submit a claim by May 18, 2026 to receive compensation.
This Discover Card Merchant settlement eligibility extends nationwide, and merchants may receive anywhere from small fixed payments to larger amounts depending on their Discover processing volume and MID-level impact.
Deadline for filing a claim: May 18, 2026
Discover Card Merchant Class Action Payout: $10-2000
The Discover Card Merchant settlement amount per person varies because payments are based on each merchant’s Discover MID-level overcharge. While exact amounts differ, claimants in this settlement may receive between $10 and several thousand dollars, depending on factors like total interchange overcharge, number of linked MIDs, and how many merchants file claims. Large-volume merchants with significant Discover traffic may receive higher payments.
Key payout drivers include the calculated overcharge for each MID, allocation among acquirers or intermediaries, and overall claim volume. All eligible merchants receive at least a $10 base payment if their calculated amount is zero or under $10. This is unusual for class action settlements. Most merchant settlements either pay strictly proportional to calculated damages, or exclude very small-dollar claims entirely.
The settlement includes a Minimum Total Class Payout of $540 million, so if total merchant claims don’t reach that amount, everyone’s payouts—including the $10 minimum—get increased pro rata.
The Discover Card Merchant settlement payout date is expected to occur within 240 days after the settlement becomes final, following data verification, MID allocation, and fraud checks. Delays can occur due to court approval steps, appeals, or incomplete records.
Key payout drivers include the calculated overcharge for each MID, allocation among acquirers or intermediaries, and overall claim volume. All eligible merchants receive at least a $10 base payment if their calculated amount is zero or under $10. This is unusual for class action settlements. Most merchant settlements either pay strictly proportional to calculated damages, or exclude very small-dollar claims entirely.
The settlement includes a Minimum Total Class Payout of $540 million, so if total merchant claims don’t reach that amount, everyone’s payouts—including the $10 minimum—get increased pro rata.
The Discover Card Merchant settlement payout date is expected to occur within 240 days after the settlement becomes final, following data verification, MID allocation, and fraud checks. Delays can occur due to court approval steps, appeals, or incomplete records.
Payment-Related Class Actions
$800
$100
$100
Average Payouts
Discover Card Merchant Class Action Eligibility
To determine Discover Card Merchant class action eligibility, the claim form checks whether you processed Discover transactions that were potentially misclassified as commercial cards. Discover Card Merchant class action claimants may be asked to confirm:
- Business name, TIN, and contact details
- Whether you accepted Discover cards between 2007–2023
- Associated Discover Merchant IDs (MIDs)
- Whether any downstream processors handled your transactions
These questions matter because payouts are based on MID-level overcharge data, reconstructed from Discover’s records. A unique aspect of this case is that Discover created substitute MIDs for merchants whose historical data was missing, ensuring they remain eligible.
You can apply if you were an e-commerce merchant, including those who sold through Shopify, WooCommerce, BigCommerce, Squarespace, Wix, or any online checkout that accepted Discover. E-commerce merchants are included because your online payments still route through a Discover MID or a downstream processor. Even if you never saw your Discover MID directly—for example, if Shopify Payments or Stripe processed your Discover transactions—you may still be a Settlement Class Member.
Accepted or processed Discover credit card payments between 2007–2023.
You are an End Merchant, Merchant Acquirer, or Payment Intermediary.
Your business was associated with a Discover MID.
You processed Discover transactions in any setting — in-store, online, or via platforms like Shopify, Stripe, or PayPal.
Discover Card Merchant Class Action Claim Form
The Discover Card Merchant class action claim form is quick and simple with Chimo. Some settlements take longer due to court approval, appeals, or fraud checks, but Chimo streamlines the process so you can get your share fas. Here's how to file a claim against Discover Card Merchant:
1
Check eligibility now by answering a few quick questions
2
Tell us where you want your check sent
3
Submit your form before May 18, 2026
You'll receive confirmation and updates on your claim status.
FAQ
You’re eligible if your business accepted or processed Discover credit cards between 2007 and 2023—whether in-store, online, or through platforms like Shopify, Stripe, or PayPal. Eligibility includes End Merchants, Merchant Acquirers, and Payment Intermediaries. Even small or infrequent Discover volume qualifies. If you didn’t opt out and submit your claim details by May 18, 2026, you can receive a payout.
Payouts vary widely because they’re based on Discover’s calculated overcharge for each merchant’s unique Merchant ID (MID). Most small merchants will receive $10–$150, mid-size merchants may receive hundreds to thousands, and high-volume processors may receive more. Anyone whose calculated payout is under $10 will still receive a guaranteed $10 Base Payment.
You’ll provide your business name, Tax ID, contact information, and preferred payment method. If you’re a Managed Direct Merchant, you’ll also confirm the correct entity to receive payment. You do not need statements, receipts, or transaction logs—the settlement uses Discover’s own data to determine your payout.
The deadline to submit your claim or payment information is May 18, 2026. Missing this deadline means you lose your right to a payout and are still bound by the settlement release. Filing early ensures you’re included when payments are distributed.
The settlement requires payments to be distributed within 240 days after the settlement becomes final. Before that, the administrator must verify claims, allocate MID-level calculations, conduct fraud checks, and finalize payment instructions. This entire process typically takes several months, but you’ll be notified once your payout is calculated.
Discover allegedly misclassified millions of consumer credit cards as commercial cards, which come with higher interchange fees. This meant merchants unknowingly paid inflated fees for years. The settlement reimburses merchants for these overcharges without requiring them to prove they were harmed—Discover’s own data determines the amount.
This settlement is one of the only merchant cases with a guaranteed minimum $10 payment, even if Discover’s records show you were owed $0. It also covers an unusually long period—18 years of transactions—and uses a detailed MID-level reconstruction to estimate overcharges, even when historical data is missing.
Unlike most settlements, this one builds substitute MIDs for merchants whose historical data is incomplete. That means you may still be compensated even if your original Discover merchant ID can’t be found. The administrator uses category averages, network fee tables, and comparable merchant data to estimate your overcharge.
The plaintiffs include a pizzeria, day camp, wellness company, and other unrelated merchants because the core problem—misclassified Discover cards—affected every type of merchant, not a specific industry. A diverse plaintiff group shows the court that the issue was nationwide and systemic.
Yes. E-commerce merchants qualify because Discover transactions processed by Shopify Payments, Stripe, Square, PayPal, or other gateways still flow through a Discover MID or linked processor. Even if you never saw your MID directly, you’re likely part of the settlement class.
The settlement administrator cross-checks every claim against Discover’s MID data, processor records, and business tax IDs. Claims that don’t match any MID or contradict known processing relationships are flagged for additional review. Fraud checks also look for mismatched entity names, unverifiable addresses, duplicate claims, and inconsistent ownership details.
If the settlement administrator can’t match you to any Discover MID, substitute MID, or downstream processor records, your claim will be marked ineligible. You won’t receive a payout, but you also won’t face any penalties—you simply won’t be included in the settlement distributions. You’ll receive notice if your claim is denied so you can correct any errors if applicable.
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