Under the settlement, Visa, Mastercard and a number of banks that issue debit and credit cards, including JPMorgan Chase & Co , Citigroup Inc and Bank of America Corp, would pay the merchants around $6.5 billion, the report said.
It is not clear how the payment would be split up among the card networks and the issuing banks, according to the report.
MasterCard said in a regulatory filing it would boost its reserve by about $210 million in the second quarter to account for claims related to a lawsuit with merchants.
However, it was not clear if the estimated increase in reserve was related to the settlement that the WSJ reported.
On Tuesday, Visa said in filing it allocated $600 million into a litigation account of the bank, but did not say if the amount is related to the settlement with the merchants.
Mastercard and JPMorgan were not immediately available to comment on the settlement. Citigroup and Bank of America declined to comment. (Reporting by Laharee Chatterjee in Bengaluru; Editing by Maju Samuel)