Global payment giants Visa Inc. and Mastercard Inc. are planning to implement new fees that will impact retailers accepting credit and debit cards. The proposed fee adjustments are expected to go into effect at different times for each company.
According to a document obtained by Bloomberg News, Visa will begin charging additional fees for online transactions starting in October. This will be followed by new fees for commercial credit, debit, and prepaid cards in April. On the other hand, Mastercard is set to introduce a pre-authorization fee for credit card purchases in October.
These fee increases could have a significant financial impact on merchants, potentially resulting in over $500 million in additional fees annually, as estimated by CMSPI, a merchant-consulting company. The rising interchange fees have been a source of contention in recent years, with the banks that issue the cards benefiting the most from these charges, while merchants bear the costs. Although the fees may seem minimal per transaction, they have been steadily increasing as more consumers opt for credit cards, which typically have higher interchange fees compared to debit cards.
Last year, US merchants paid a record-breaking $160.7 billion in swipe fees, representing a 16.7% increase from the previous year, according to the Nilson Report. These fees continue to rise as card usage becomes more prevalent among consumers.
Both Visa and Mastercard have not yet provided any comments regarding the planned fee adjustments.