Mastercard and Visa will raise CC fees charged to merchants, starting in October (WSJ)

[Anonymalous]

https://www.wsj.com/finance/visa-mastercard-prepare-to-raise-credit-card-fees-ed779be1

There isn't a good alternative because this is a WSJ exclusive, so here's a quick summary for those who can't bypass the paywall:

• Fee increase are scheduled for October and April
• Slightly more than half is network fees (paid to MC/VISA)
• Slightly less than half is interchange/swipe fees (paid to the issuing bank/CU)
• Background: Merchant fees paid to Visa and Mastercard have increased from $33 to $93 billion between 2012 and 2022 (wow)
• The new changes are estimated to add +$0.502 billion/year to that cost (so not a big jump)
• There's a quick mention that "[m]any of the increases are for online purchases", but it's unclear what that means
• Related news: The bills that are intended to reduce fees by requiring CC issuers to use a second network have been referred to committee in both the House and Senate

Links to Credit Card Competition Act:

https://www.congress.gov/bill/118th-congress/senate-bill/1838

https://www.congress.gov/bill/118th-congress/house-bill/3881

[Lou-natic]

I just got an email today that privacy.com is going to start charging 3% for international payments. Not a big deal for me but interesting timing.

If you don't know about them, Privacy lets you make credit card payments using merchant locked or burner Visa cards funded directly from your checking account. You get all the typical payment protections afforded to credit cards but it works like debit. I've slowly been transitioning things to using credit cards for a few years for the cash back but before then all my online shopping went through them so I wasn't putting my debit card info on the web.

Also, what is the point of increasing profit by half a billion a year when the fees are already under scrutiny as it is? Are they actively trying to shoot themselves in the foot or what? Ridiculous especially when that extra half a billion is a drop in the bucket anyway. Insanity.

[Anonymalous]

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@Lou-natic wrote:

Also, what is the point of increasing profit by half a billion a year when the fees are already under scrutiny as it is? Are they actively trying to shoot themselves in the foot or what? Ridiculous especially when that extra half a billion is a drop in the bucket anyway. Insanity.

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It almost feels like they're trying to slip something in under the wire... but that makes no sense, because the bill doesn't fix rates. The other easy assumption is they're trying to offset inflation, but again that makes no sense because a large part their fees are based on a percentage of sales, so they have an inflation adjustment built-in. We may be missing something.

[ChargedUp]

Strange that I just got through reading that MC is denying that it plans to raise fees....

https://www.reuters.com/business/finance/mastercard-denies-report-it-plans-raise-credit-card-fees-20...

...and from Mastercard themselves.

https://www.mastercard.com/news/press/2023/september/setting-the-record-straight-clarifying-recent-h...