Card Networks Mull Fee Increase
The costs of using some cards is going on the incline, as news is breaking that the nation’s two largest card networks, Visa and Mastercard, are preparing to up the fees charged to merchants to accept network-branded cards. The change will go into effect in early April, according to reports from The Wall Street Journal.
According to a Visa spokeswoman, the new price changes impact fees that Visa hasn’t adjusted in at least three years. “Visa’s network fees are paid by our financial institution clients and used to enhance the safety, efficiency and innovation of our platform, and are set based on market conditions and to reflect the value we deliver,” she added.
The changes, according to reports, mostly involve interchange fees, or the fees paid to banks by merchants when consumers use either a debit or credit card to make a store purchase. However, interchange fees aren’t the only ones going up – the fees Visa and Mastercard charge to banks are also reportedly set to increase.
It’s a fact that merchants, of course, do not love. Interchange fees are a longstanding point of contention between merchants, banks and the card networks – and it’s an issue that ended up in front of the Supreme Court, which ruled in favor of the card networks.
More recently, it has also been the subject of an intense lobbying campaign, as Walmart and other retailers join forces with card processors in an attempt to push lawmakers and regulators to give them a seat at the table when it comes to setting standards for card security and new payments tech.
The card networks say the increase in fees is necessary to step up anti-fraud and security measures as more transactions shift online. They further claim that any increase in fees is more than made up by the increase in sales that comes from having secure digital payments available to merchants and consumers.