Mastercard and Visa had intended to increase some fees in April of 2020 on certain transaction categories including remote purchases. The global card networks held off making these changes during the pandemic. But now a year later, they are moving forward with their original plans to increase some rates.
This got the attention of Senator Dick Durbin (D-IL), U.S. Representative Peter Welch (D-VT) who sent a letter to Mastercard’s and Visa’s CEOs asking them to hold off on raising fees again. They stated in the letter:
On March 26, 2020, we wrote your companies to urge to you call off your plans to raise swipe fee rates during this pandemic. Commendably, you did postpone those fee increases. However, it has now been publicly reported that Visa and Mastercard are again preparing to significantly raise many of the swipe fee rates you charge for card transactions. This is a mistake.
For the sake of consumers and small businesses, we again urge you: don’t do it.
Over the past year, the COVID-19 pandemic and economic disruption have hit American consumers and small businesses hard. Tens of thousands of small businesses, the backbone of our nation’s economy, have permanently closed. Many businesses that are left, according to the February 24 Wall Street Journal article “Covid-19 Shopping Makes Card Fees a Bigger Burden for Merchants,” have only stayed afloat through online purchases. But your proposed fee increases would disproportionally affect online transactions.
Millions of Americans are unemployed, unsure of how they will pay the bills or put food on the table. Yet several of your proposed fee increases, according to the Wall Street Journal, would target supermarket and restaurant transactions as many more of those purchases have moved online.
As a guess, I would suspect that the card networks do hold off until later this year. A gesture of good-will might go a long way least the members of Congress decide to retaliate and take on other so-called swipe fee issues like regulating credit card interchange.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
