Card transactions are increasing day by day all over the world due to several factors. On the other hand, merchants must pay interchange fees to a bank, card issuing company, or a payment processor based on sales volume. The fees will change twice a year April and October and merchants should check them with more attention. However, Master and Visa card companies hold their interchange updates because of Covid-19 effects. Although the changes were slated to take effect in April 2020 last year, they decided to push out the same. It is necessary for merchants to be aware of the updates from various sources that will help make a better decision.
Here are some changes that are still active in April 2021 regarding interchange rates.
Visa fee modifications
Visa is implementing new interchange fees for all commercial credit transactions and introducing a new category of programs for consumer cards. Additionally, it will implement new interchange fees for payment service providers that are accepting purchase transactions.
Nowadays, many people use EMV chips for card transactions and Visa will address the issues of improper chip card transactions. The company will implement new interchange fees to reduce the fallback problems when a customer fails to complete a transaction with an EMV chip card. Apart from that, merchants should pay $0.10 for each fallback transaction with a fallback rate of 10% or above.
Moreover, the company revised the interchange fees for card-not-present transactions in the UK and EEA countries that will affect consumers. The new revised fees are 1.15% for consumer debit cards instead of 0.20% and 0.30% for credit cards instead of 0.30%. On the other hand, the interchange fees for card-present transactions will remain unchanged in those countries. This will come into effect from 16th October 2021 and the revised fees for business cards is 1.60% and 1.80% for corporate and purchasing cards.
Mastercard fee modifications
Mastercard modified the interchange fees which will come into effect from April 2021. The 10 new consumer credit small-ticket interchange programs introduced by the company will include a value of $ 5.00 or less in the US. Apart from that, the company is considering expanding the Merit 1 interchange program with new interchange programs. Merit 1 real estate programs and Merit 3 Prepaid programs are also facing new interchange rates.
Discover fee Modifications
Discover is one of the leading credit card companies in the US that offers a wide range of services for customers. On the other hand, it will modify new interchange fees for prepaid card and consumer debit voucher transactions. Besides that, it is adding a new program integrity fee that aims at compensating additional risk and processing sales. At the same time, it will charge the fee ($0.05) related to the US Base Submission Level Program Card Sales. The company will also reduce the assessment fee from $0.022 to $0.005 per card transaction applicable to US customers.
American Express OptBlue Fee modifications
American Express is the topmost credit card company in the US and modified the sponsorship & assessment fee. It also increased the inbound fee from 0.40 % to 1.00 %.