Visa and Mastercard are set to raise fees on credit card transactions. After two years of delays due to the coronavirus pandemic, the fee changes are set to roll out in April.
Visa and Mastercard Expected to Raise Interchange Fees in April
Anticipate a change to your credit card fees starting in April. The Wall Street Journal (WSJ) reports that both Visa and Mastercard are set to raise fees on credit card transactions, as costs have ballooned for both payment networks during the COVID-19 chaos of the last two years. Interchange fees are expected to make up most of the fee increases. The report states that many of the impacted transactions will be online consumer credit-card purchases.
According to the WSJ report, both Visa and Mastercard will increase the fees on more than a dozen in-store purchase categories, including small and medium-sized grocery stores and many in-person retailers. Consulting company CMSPI believes Mastercard’s interchange fee changes will result in an estimated net annual increase of around $330 million for merchants.
What are Interchange Fees?
Interchange fees are an often-unseen charge added to the cost of a credit card transaction. These interchange fees are also known as “swipe fees” and are added by payment networks per-swipe fee charged by banks to merchants using credit or debit cards.
Some Business Sectors to See a Fee Reduction
It’s not all bad news for credit card users, however. Mastercard lowers merchant costs for transactions under $5 and reduces fees to COVID-impacted businesses, such as hotels and casual dining restaurants. Visa will lower fees for online and in-store purchases from retailers with less than $250,000 in annual consumer credit card volume. Additionally, according to a spokesperson, Visa will lower fees by 10% for more than 90% of American businesses.