WSL Future of Health Event

Merchants welcome delay in ‘swipe fee’ increase

Print Friendly, PDF & Email

Visa and MasterCard are postponing planned credit-card fee increases that were set to kick in this year after the plans drew criticism from lawmakers.

WASHINGTON — Citing the continuing effects of the coronavirus pandemic on businesses, Visa Inc. and Mastercard Inc. said they will hold off on increasing interchange fees for merchants until next April.

The move was applauded by the Merchants Payments Coalition (MPC), which represents supermarkets, retail pharmacies, convenience stores, gasoline stations, online merchants and others in their fight for lower swipe fees — the money charged to retailers by banks for each debit-card and credit-card transaction.

The fees represent reimbursement to the financial companies for their costs in offering credit cards and executing electronic debit transactions.

“Visa and Mastercard did the right thing in delaying this dramatic and unwarranted increase,” said Doug Kantor, counsel at the Washington, D.C.-based MPC. “But the fact remains that credit card swipe fees paid by U.S. merchants are among the highest in the world. The way these fees are set shows how Visa and Mastercard’s market power allows them to charge more than any free and open market would bear.”

Kantor said it’s time for Congress and financial industry regulators to act to limit the fees.

Visa and Mastercard had sought to raise interchange fees for many online purchases by around 0.05 to 0.10 of a percentage point, according to a document reviewed by The Wall Street Journal. Those changes would have resulted in hundreds of millions of dollars in additional interchange fee charges for merchants within the span of a year.

Earlier this month, Senate Judiciary Chairman Richard Durbin, a Democrat of Illinois, and Vermont Democratic Rep. Peter Welch wrote to the card companies asking them to cancel the planned increases, which the lawmakers said would be “slamming struggling merchants” and would slow the economy’s recovery from the coronavirus pandemic.


You must be logged in to post a comment Login