Visa, Mastercard Delay Credit-Card Swipe Fee Increases

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 [e-mail]

(END) Dow Jones Newswires

March 16, 2021 10:41 ET (14:41 GMT)

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