It’s probably a matter of when, not if. That would be the reported plans of Mastercard and Visa to raise interchange, or swipe fees, for merchants. Payment transaction costs have always been at the center of heated battles between merchants and the card networks. Small merchants especially believe they get the short end of the stick since they do not have the negotiating leverage of the big retailers. Right now, the COVID-19 pandemic means there are more important health and safety issues to deal with across the globe. But when COVID-19 subsides, the contentious interchange issue will certainly be back.
The following Wall Street Journal article reports more on this topic which is excerpted below:
Visa and Mastercard are the largest U.S. card networks, and they tweak card fees on a continuing basis. The latest changes were decided before the pandemic spread in the U.S., according to the people, and the companies could shelve or delay the planned fee increases if the economy worsens. Both companies already delayed fee changes scheduled to kick in this month to July, citing the pandemic.
A Visa spokesperson said the company has “made no decisions regarding what, if any, changes will be made in the future in recognition of the dramatically changed environment in which all businesses are operating today.”
A Mastercard spokesman didn’t comment directly on the potential changes but said that delaying the planned new fees “allowed our customers and partners to focus on their core activities and manage through this unprecedented event.”
Both companies pledged to support their clients. Visa and Mastercard also said this week they were committing $210 million and $250 million, respectively, to helping small businesses.
Overview provide by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group.
For the original article quoted in this coverage, please click here.
