London: Visa and Mastercard are planning to boost the fees that many retailers pay when accepting customers’ credit and debit cards.
The additional Visa charges are slated to begin in October for online transactions, followed in April by new fees for commercial credit, debit and prepaid cards, according to a document seen by Bloomberg News. For Mastercard, a new pre-authorization fee for credit-card purchases will start in October, the document shows.
With the increases, merchants could pay more than $500 million in additional fees each year, according to merchant-consulting company CMSPI.
So-called interchange fees have become a contentious issue in recent years. While Visa and Mastercard set the rates for those fees, it’s the banks that issue the cards that keep most of the fees. Even if they amount to just pennies per purchase, those costs have been rising in recent years as more consumers use credit cards, which typically carry steeper interchange fees than debit cards.
In all, US merchants shelled out a record $160.7 billion on so-called swipe fees last year, up 16.7 per cent from 2021, according to the Nilson Report industry publication.
Visa and Mastercard didn’t immediately respond to requests for comment.
The new fees were first reported earlier Wednesday by the Wall Street Journal.