Visa Inc. and MasterCard Inc. are gearing up to introduce fee hikes for retailers when they accept payments via credit and debit cards, potentially leading to increased costs for businesses and, eventually, consumers.
Starting this October, retailers will incur additional fees for processing Visa credit card transactions, particularly for online purchases. This will be followed by the introduction of new fees for commercial credit, debit, and prepaid cards in April of the following year. Meanwhile, MasterCard is also set to roll out new fees for merchants accepting credit card payments, beginning in October.
A report from CMSPI, a prominent trade consulting firm, estimates that these fee increases will collectively cost merchants an additional $500 million in fees annually. While Visa and MasterCard typically set these fees, the lion’s share of the costs falls on the issuing banks of the cards. However, there are nominal fees associated with certain purchases, and over time, these fees have steadily risen. This is partly attributed to the growing usage of credit cards by consumers, as the fees charged to credit card issuers tend to be considerably higher than those for debit cards.
The Nilson Report, a trusted source for payment industry data, revealed that U.S. businesses shelled out a staggering $160.7 billion in such fees last year, marking a significant 16.7% surge from 2021.
Remarkably, both Visa and Mastercard have remained mum on the details of this impending fee hike, declining to comment on the news report. The silence surrounding the issue leaves retailers and consumers alike in anticipation of potential ramifications and cost increases in the coming months.
As this development unfolds, it remains crucial for retailers and consumers to stay informed about the evolving landscape of credit card fees and its potential impact on their bottom line. While it’s yet to be seen how these fee increases will play out, one thing is certain: the payments industry continues to evolve, and both businesses and consumers must adapt to these changes.