Visa and Mastercard could raise interchange fees

TechCrunch | 2/16/2019 | Staff
cyanbyte (Posted by) Level 3
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According to a report from the WSJ, Visa and Mastercard are considering raising interchange fees on card transactions in the U.S. Visa and Mastercard generate most of their revenue from these small processing fees, and it could have implications for merchants and fintech startups.

When you pay with a credit or debit card, merchants pay a small fee to the bank that issued this card. Your bank then pays an even smaller fee to the company that operates the card network.

Cases - Card - Issuers - Card - Networks

In most cases, card issuers and card networks are separate companies. For instance, Chase issues a Visa card, Chase gets an interchange fee on every card transaction, and Chase pays a tiny fee to Visa. Some companies also operate a network and issue cards themselves, such as American Express.

The WSJ says that Mastercard and Visa will raise their fees in April — Visa confirmed the change. While fees on each transaction are nearly unnoticeable, they add up quite rapidly. They generate a ton of revenue for Visa and Mastercard, and they represent significant costs for large merchants.

Consumer - Protection - Issue - Customers - Prices

It could become a consumer protection issue as customers often end up paying higher prices because...
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