Visa and Mastercard have agreed to cut and cap credit card processing fees as a part of a major settlement with merchants after decades of litigation.

Why it matters: U.S. businesses are expected to save at least $29.8 billion in the five-year deal, according to attorneys who represented the plaintiffs in the class-action settlement.

Merchants will have more flexibility to adjust how much they charge consumers for goods sold via credit card.

What they're saying: "The settlement will reduce credit interchange rates for U.S. merchants, comprised largely of small businesses," Visa said in a statement.

"This agreement brings closure to a long-standing dispute by delivering substantial certainty and value to business owners, including flexibility in how they manage acceptance of card programs," Mastercard chief legal officer Rob Beard said in a separate statement.

The big picture: Merchants currently pay an average of 1.5% to 3% per credit card transaction, according to BankRate.com.