Credit card companies Visa and MasterCard have agreed to pay more than $6bn to US retailers in a negotiated settlement to resolve a seven-year-old case.

Visa agreed to pay $4.03bn to settle the class-action lawsuit while MasterCard and banks that issue cards and were also part of the suit will pay $2.02bn, according to documents filed in federal court in New York on Friday.

The two will also have to cut their so-called “swipe” fees for eight months that could give the merchants another $1.2bn in relief. And they will have to allow merchants to impose a surcharge on credit card transactions, subject to a cap.

Law firm Robins, Kaplan, Miller & Cires, which represented about seven million merchants in the suit, said that penalties for the two and other card-issuing banks added up to $7.25bn – $6.05bn for past damages and the $1.2bn for relief.

Also involved in the settlement are card-issuing banks including JPMorgan Chase, Bank of America, Citibank, Wells Fargo, Capital One and others.

Visa’s total payouts appeared to include settlements from separate individual suits over the same issue that were not part of the class-action suit.

“The reforms achieved by this case and in this settlement will help shift the competitive balance from one formerly dominated by the banks which controlled the card networks to the side of merchants and consumers,” said Craig Wildfang, lead Robins, Kaplan lawyer in the case for the merchants.

“Over time, the reforms induced by this case and in this settlement should help reduce card-acceptance costs to merchants, which in turn, will result in lower prices for all consumers.”

But in a reaction, American Bankers Association president Frank Keating blasted the idea that consumers will benefit from the deal.

“Let’s be clear – retailers, not consumers, benefit from today’s resolution,” he said.

“This settlement even provides merchants with the ability to impose ‘checkout fees’ on customers just for using credit cards.”

This may be the last time retailers are allowed to take Visa and Mastercard to court over interchange fees. The proposal provides for extensive litigation releases that would keep stores that join the settlement from suing over a wide range of issues relating to fees and anti-steering restraints.