Visa e Mastercard are preparing to increase credit card fees. These card networks are the two largest players in the industry. The news was reported by Wall Street Journal, according to which the increases should take place between October and April.
According to CMSPI, a consultancy firm that works with merchants, such increases would result in an increase of approximately $502 million per year for merchants. About half of the increase will go to Online shopping, while the rest will concern increases in so-called interchange fees, or “swipe fees,” paid by merchants every time a customer makes a credit card payment.
The dispute between card networks and merchants
The economy of interchange fees it is largely hidden from customers. But fees are a major source of contention between card networks and merchants, both large and small. And while in Italy we work for reduce transaction fees by up to 30 euros, in the USA they could even increase.
If the fee increase for credit card companies is approved, it would increase what are already significant fees paid by merchants. The nilson reports, an industry research firm, estimated that commissions paid by merchants amounted to $93 billion last year, up from $33 billion in 2012, the Wall Street Journal reports.
But it could be the buyers who pay, if traders pass them on to customers through price increases, at a time when high inflation is already taking its toll.
Congress's move
Regarding the use of these fees, Visa, Mastercard and the big banks claim that “they serve to cover the costs related to fraud prevention and innovation”, explains the newspaper. Often, banks use revenue from swipe fees to fund credit card rewards programs. However, the impact of these tariffs has come into focus American Congress, which recently revived a law that would allow merchants to process many Visa and Mastercard credit cards through alternative networks, with the goal of reduce rates that traders have to pay.
