Payments

Visa, Mastercard set to raise credit card fees

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August 30, 2023

Visa and Mastercard are planning to raise fees merchants pay when accepting credit cards, according to a report in The Wall Street Journal carried by msn.com.

The increases are set to begin in October and April, according to documents obtained by The Wall Street Journal. Many of the increases include online transactions.

The changes could cost an additional $502 million in yearly fees, according to CMSPI, a merchants consulting firm.

Network fees will account for slightly more than half of added revenue, the consulting firm estimated. The balance will be from higher interchange fees, known as swipe fees.

The interchange fees are largely hidden from shopper, but are a source of contention between the card networks and merchants.

Merchants pass along a portion of the fees to customers in higher prices.

Network fees go to Visa and Mastercard while interchange fees go to card issuing banks.

The card networks and banks claim the fees help fraud prevention and innovation related costs.

Legislation has been introduced in both the House and Senate to allow merchants to process credit cards over alternate networks, similar to a rule that currently applies to debit cards.