Visa, Mastercard Delay Credit-Card Swipe Fee Increases
March 16 2021 - 10:56AM
Dow Jones News
By AnnaMaria Andriotis
Visa Inc. and Mastercard Inc. are postponing planned credit-card
fee increases that were set to kick in this year after the plans
drew criticism from lawmakers.
Citing the continuing effects of the coronavirus pandemic on
businesses, Visa and Mastercard said they will hold off on
increasing interchange fees for merchants until next April.
Interchange fees are set by networks such as Visa and Mastercard
and are paid by merchants to card issuers when shoppers make
purchases with credit cards. The Wall Street Journal reported on
the planned increases last month.
Visa and Mastercard plans included raising interchange fees for
many online purchases by around 0.05 to 0.10 of a percentage point,
according to a document reviewed by the 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, according to estimates from CMSPI, a merchants' payments
consulting firm.
The planned fee increases prompted Sen. Richard Durbin (D.,
Ill.) and Rep. Peter Welch (D., Vt.) to send a letter this month to
the chief executive officers of Visa and Mastercard calling on the
companies to refrain from moving forward with the increases, citing
the pandemic's effect on businesses.
Visa and Mastercard this week informed Sen. Durbin's office that
they wouldn't move forward with the changes. The companies will
also delay implementing planned fee decreases until next year.
Last year, Visa and Mastercard postponed planned fee increases
that were supposed to take effect shortly after the pandemic
began.
"In light of the current situation and recognizing that U S.
businesses are still recovering, Visa has taken actions that have
led to an overall decrease in interchange rates during the
pandemic," a spokesman said. "Visa has delayed several planned
changes and will not make any future interchange rate changes for
another year while the economy recovers."
Mastercard is "mindful that some merchants are still facing
unprecedented circumstances," a spokeswoman said.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com
(END) Dow Jones Newswires
March 16, 2021 10:41 ET (14:41 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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