Visa and Mastercard have agreed to cut their US transaction fees in a landmark settlement that merchants say will save them $30bn over five years.

The deal, announced on Tuesday, will require the payments companies to lower the so-called swipe fees they charge sellers over the next five years.

It will also allow merchants to charge different prices to consumers based on which credit card they use.

The settlement does not include a requirement for merchants to pass on the savings from lower fees to consumers.

Visa and Mastercard on Tuesday reached a landmark $30 billion settlement that will limit credit and debit card fees for merchants, with some savings likely to be passed on to consumers.

The antitrust settlement is one of the largest in US history, and upon court approval would resolve claims in litigation that began in 2005.

Merchants have accused Visa and Mastercard of charging inflated swipe fees, or interchange fees, when shoppers use their credit or debit cards.

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.