Updated from 1:50 p.m. EDTThe $3 billion settlement of an antitrust lawsuit filed against Visa USA and MasterCard over debit card payments is good news for retailers, but bad news for banks and data-processing companies. The settlements, announced this week, mark an end to a long-running battle between the nation's merchants and two big credit card associations. The deals, which must still be approved by a federal judge, were negotiated just days before the class-action lawsuit brought by Wal-Mart ( WMT), Sears ( S) and other retailers was slated to go to trial. Under the separate settlements, the nation's retailers will receive payments totaling $2 billion from Visa and $1 billion from MasterCard. The payments will be spread out over 10 years. Merchants had complained that Visa and MasterCard had pressured them into allowing customers to pay for goods and groceries with either credit cards or debit cards that require customer signatures. Merchants had balked at this arrangement because the signature-authorized debit cards carry higher fees than debit cards that are activated by personal identification numbers, or PINs. Both card companies agreed to reduce the fees they charge on signature debit purchases, something that could put a crimp in bank revenues because banks share in those fees. It's estimated that on an annual basis the deal could reduce debit card fees by as much as $1 billion. But it may be too soon to say just how hard the nation's banks will be hit. Analysts at UBS Warburg estimated that the deal could reduce overall bank revenues anywhere from 1% to 2%. "The banks are going to have to accept some lower revenues,'' said UBS Warburg bank analyst John McDonald. "But it should be kept in perspective of the banks' overall broad-based revenue streams.'' The banks most likely to feel the impact of the decision are big lenders that have issued millions of debit and ATM cards to their customers. Those include Bank of America ( BAC), Citigroup ( C), J.P. Morgan Chase ( JPM) and Wells Fargo ( WFC). A Bank of America spokeswoman said the settlement could reduce earnings by as much as $60 million this year and $200 million next year, unless the bank makes-up the shortfall in other areas. Denis LaPlante, a bank analyst at Fox Pitt Kelton, said Bank of America may feel the greatest revenue pinch because it controls about 15% of the debit card market. He estimates that it could cut into the bank's revenue by as much as 2%. But LaPlante and other analysts say the impact would be minimized if the settlement causes more use of debit cards by encouraging merchants to accommodate them. "You could see debit card volumes go up,'' said LaPlante. UBS Warburg estimates that 25% of merchants offer PIN pads that enable customers to pay for goods with debit cards. "You could very well see a big change in merchant behavior,'' said UBS Warburg information technology analyst Adam Frisch. Greater use of PIN-activated debit cards could also cut into revenue of data-processing companies like First Data ( FDC) and Concord EFS ( CE), the main operator of the nation's most popular automated teller networks. First Data is in the process of acquiring Concord. Frisch said the settlements could impact "merchant processing fees.'' But the impact should "not be catastrophic by any means.''