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"Visa, Mastercard mull increasing fees for processing transactions: WSJ"

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"Visa, Mastercard mull increasing fees for processing transactions: WSJ"

Message 1 of 11
10 REPLIES 10
Frequent Contributor

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"

Cash back and other rewards might be dropping if this part of the interchange fee is going to increase.



Message 2 of 11
Contributor

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"

If Amex doesn’t follow suit with their already high transaction fees, this might give them a better edge and start taking more marketshare from the other two. Amex adoption could increase even more hopefully to compete with Visa/MC.
Gardening till 12/2019!




Message 3 of 11
New Contributor

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"

It should be a governmental set rate on how much they charge merchants. This hurts business.

Message 4 of 11
Moderator Emeritus

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"


@Iceywarm wrote:

It should be a governmental set rate on how much they charge merchants. This hurts business.


I am pretty sure most if not all businesses just pass it on to the customer; that said, whether or not the customer will put up with it is a different story entirely so you may be right on that point.  I have been at a couple different places which directly pass it on, if you use a CC you pay a surcharge: I paid the surcharge in both instances FWIW.

 

Someday someone will build a better mouse trap when it comes to payment processing.

 




        
Message 5 of 11
Established Contributor

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"


@Iceywarm wrote:

It should be a governmental set rate on how much they charge merchants. This hurts business.


On one hand, having them high enough to enable large rewards might not be a good thing from a societal standpoint. There's something to be said about encouraging spending within one's means (not to mention reducing barriers to going cashless).

 

On the other, merchants didn't pass any of the savings to consumers when the Durbin Amendment capped them for debit cards. I don't see how that'd change if credit was capped too. However, if this increase does go through, surcharging might end up becoming more common.

 

We'll see in any case.

Message 6 of 11
Highlighted
Established Contributor

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"

I'm pretty sure the the Federal Reserve started this site to reduce fragmentation in the payment processing industry:

https://fedpaymentsimprovement.org/ (Check out the Industry Articles page in particular.)

 

Pretty much everyone knew that a 2 to 3% surcharge on virtually all consumer goods due to the card network interchange fees wasn't going to last forever with so much opportunity for new fintech startups to disrupt it. (Like Bezos said, "Your margin is my opportunity." )

 

I think the fed has been trying to prevent a situation where a consumer walks up to a POS terminal and is presented with 30 different choices of payment, many of which offer substantially lower interchanges fees for the merchant.

27 FICO Scores + 3 VS3. MTG (Mortgage), AUT (Auto), and BKC (Bankcard) are scores 5,4, and 2 from the top.

Final update at AoYA 1 year. There's still a lot of points on the table: I get a significant boost from being at AZEO (50% of cards with a balance), and I'll be at zero scorable inquiries in a few weeks.

Message 7 of 11
Valued Contributor

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"

So they see the recent trend in increasing CC debt, people being 90 days late on auto loans, and probably even behind on mortgages. Which are usually indicators they're spending it elsewhere, hopefully on food for the family. So they want to increase swipe fees which will in turn hit those people again with a higher cost of living. We just saw an increase with the recent minimum wage increase here, which likely counteracts it when all said and done.

 

I guess all these CC perks aren't really much of a perk when your paying for them in other ways.

 

Also, it must be nice for people like Bezos. Amazon will pay $0 taxes on $11,000,000,000 in profit for 2018

Looks like we still have to depend on Averege Joe to keep the Country going.

 

 






Message 8 of 11
Established Contributor

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"


@CassieCard wrote:

I'm pretty sure the the Federal Reserve started this site to reduce fragmentation in the payment processing industry:

https://fedpaymentsimprovement.org/ (Check out the Industry Articles page in particular.)

 

Pretty much everyone knew that a 2 to 3% surcharge on virtually all consumer goods due to the card network interchange fees wasn't going to last forever with so much opportunity for new fintech startups to disrupt it. (Like Bezos said, "Your margin is my opportunity." )

 

I think the fed has been trying to prevent a situation where a consumer walks up to a POS terminal and is presented with 30 different choices of payment, many of which offer substantially lower interchanges fees for the merchant.


I think it's not a matter of if there'll be some sort of cap imposed, but when. The alternative is that the US going cashless gets delayed for possibly decades as people go back to using cash to avoid surcharges imposed by nearly every store. (In my experience, the places that do have minimums and/or surcharges tend not to differentiate between debit/credit cards despite being required to.)

 

Alternatively, there could be some sort of e-money thing that gets released which effectively works the same as regular cash and has little to no fees. I could see people adopting that fairly quickly if the alternative is paying more to use/accept cards.

 

Message 9 of 11
Established Contributor

Re: "Visa, Mastercard mull increasing fees for processing transactions: WSJ"


@Janus wrote:

I guess all these CC perks aren't really much of a perk when your paying for them in other ways.

Check out this short video titled 'Who actually pays for your credit card rewards?', posted less than a week ago on YouTube by Vox:

https://www.youtube.com/watch?v=ySH5SudRwak

 

This is all old news to many, and I'm sure you already knew it, Janus,  but I didn't know that different cards on the same network (MC, VISA, etc.) can charge the merchant more in interchange fees. I knew about AMEX generally costing more for merchants, but up until a month or so ago I didn't know that a Visa Signature card can charge more than a 'basic' Visa card.

 

I now try to pay with cash first, then debit at small businesses I frequent. Some of them do give a discount for paying with cash.

27 FICO Scores + 3 VS3. MTG (Mortgage), AUT (Auto), and BKC (Bankcard) are scores 5,4, and 2 from the top.

Final update at AoYA 1 year. There's still a lot of points on the table: I get a significant boost from being at AZEO (50% of cards with a balance), and I'll be at zero scorable inquiries in a few weeks.

Message 10 of 11
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