Visa has announced that they will be making changes to interchange fees that merchants pay (basically the fee merchants pay to accept a credit card). The majority of this fee goes to the bank that issues the card (e.g Chase or Wells Fargo), generally 1.6%+. The rest of it is then divided between acquiring bank, payment processor and assessing processor. While the majority of the fee goes to the bank that issues the card, the payment network (in this case Visa) sets the interchange fees. The new rates will come into affect in April & October. Fee changes are as follows (according to documents seen by Bloomberg):
- Card not present (e.g online) transaction will increase from $1.90 to $1.99 on a $100 purchase. Premium Visa cards fee will increase from $2.50 to $2.60 on a $100 transaction
- Premium Visa card fee on a supermarket category will decrease from $1.15 to $0.77 on a $50 purchase
These changes could have a flow on effect for consumers that earn rewards points & miles. For example with interchange fee being lowered on grocery purchases card issuers might be less likely to offer a category bonus on groceries. In addition with card not present fees increasing online merchants such as Amazon might start requiring higher minimums for purchase (e.g Amazon sells low denomination gift cards currently).
