A notice shown at a Senate hearing last week says that the network plans to raise some of the fees it charges for Visa credit card payments.
This month, the processor Global Payments said that Visa plans to raise some of the fees it charges stores and banks for credit card payments starting January 1st.
The letter from October 10 says that the base transmission cost that banks pay will go up from 18% of a penny to a quarter of a cent. It also says that the abuse price that merchants who use Visa will go up from 9 cents per transaction to 15 cents. A misuse fee will be charged for a transaction that is approved but not completed within a certain amount of time.
Visa credit cards: Fees will be lower for American customers this year
The transmission fee is paid by the banks that issue the cards, but most of the time, businesses are the ones who have to pay these fee increases. The notice also says that as of January 1, Visa’s U.S. digital commerce service fee will be based on authorized transactions instead of clearing and settlement, but the rate will not change.
There is pressure on Visa to lower the fees it charges stores when customers use their credit cards to buy things, which is happening at the same time as the planned fee hikes. Merchants, restaurants, and other businesses pay between 1% and 3% in interchange fees to accept credit cards. These fees depend on how many transactions they handle.
Those fees are set by the banks that issue the cards, and networks like Visa may charge extra network fees. The network sector is run by Mastercard, a company based in San Francisco and a competitor.
Last week, the fees charged for processing credit card payments were the subject of questions from the Senate Judiciary Committee. Both Democrats and Republicans said that the fees were too high for stores, especially small ones, and asked them to get their systems up to date. The senators were specifically talking about the proposed Credit Card Competition Act.
This bill would make the market more competitive by requiring a network other than Visa and Mastercard to be available for transaction processing.
Doug Kantor, who speaks for retail groups that support the proposed law, told the committee that Visa planned to raise fees during his testimony. He is also the general counsel for the National Association of Convenience Stores and a member of the executive committee of the Merchants Payments Coalition.
According to what Kantor said at the hearing on November 19, Visa is going to raise its fees again in January. Most of the time, networks only raise fees in April and October. Not only that, but he also said that we are still thinking about another base fee hike that would affect banks.
But the Electronic Payments Coalition, which speaks for the card issuers and the networks that handle them, said in a statement released after last week’s hearing that interchange fees have not changed much in the last few years and have stayed at about 2% since 2017.
It is important to note that the EPC’s report says businesses have been paying almost the same amount for credit card services for ten years. A store or business would only pay more for transaction processing services if their sales went up by the same amount.
Visa and Mastercard to pay more than $1,700 million in payments to its users
Courts in the US recently said that the fees people have been paying for years to use credit cards are not fair. Because of this, these companies will have to give their customers a lot of money back to make up for the years of unfair charges.
People who used Visa or Mastercard debit cards and paid fees that could not be returned between October 1, 2007, and July 26, 2024 must have had the fee charged by an ATM network like Bank of America, Chase, or Wells Fargo.
When you think you might be able to get this refund, please follow the steps set by each bank. We know you will not remember if you were charged for 14 years or not. Every user should be able to complete this process quickly and easily.
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