Visa Raises Interchange Rate, Pressures New Businesses

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Last Updated on April 29, 2020 by

Visa recently announced they’re changing their interchange rate fee structure so the rates will go up or down, depending on a few factors, and the changes are expected to roll out in April and October.

Visa is also increasing their card not present transaction fees, which is one of the fastest-growing payment methods for a lot of businesses, such as ecommerce merchants, subscription services, and online bill payments.

(Update: Due to the COVID-19 pandemic, both Visa and Mastercard postponed the change to July, and are now weighing whether to institute the changes at all. They are also considering a reprieve for gas stations which are struggling to meet the October deadline.)

Visa prepaid debit cardAccording to a notice Visa sent to all the banks, they were making the changes to persuade more users to swipe their cards instead of writing checks or using cash. But that optimization means higher costs for the U.S. businesses hit with these increased fees. An article in said any interchange rate decreases will be minor and only affect a few industry types.

Many merchants are not happy about the interchange transaction fees to begin with, especially if Visa is trying to persuade more users to swipe their cards.

As said in their article:

Interchange fees have long been a point of contention between merchants, banks, and card payments providers such as Visa and Mastercard. With Visa’s sweeping change continuing to hike up fees for credit card transactions, it is no surprise that many businesses, especially in the retail industry, are unhappy with the announced increase.

While merchants may have control over whether a customer’s card is swiped or keyed in, they have no control over what kind of card their customers use. As a result, merchants are constantly put in positions where they have to pay the price of costly interchange fees, and the markups charged by their processors.

Merchants who are facing higher interchange and card not present fees in 2020 should take additional steps to make sure that their fees are not being hiked higher than expected. Also, consider building some of these fees into your pricing just to cover your additional costs. Make sure you understand any new fees being tacked onto your merchant services account, and keep an eye out for vague or hard-to-understand explanations of why you’re seeing these changes.

It’s important that you know how much you’re being charged for your merchant services, especially if you’re in a high-risk industry, because you could be paying too much or being hit with unnecessary fees. For more information, please visit our website or call us at (800) 408-0095.

Photo credit: YannickMCosta (, Creative Commons 0)

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