Mastercard Plans to Raise Credit and Debit Card Fees by Over $250 Million Despite Settlement
Almost immediately after agreeing to reduce “swipe” fees charged to merchants to process credit card transactions, Mastercard plans to increase fees for both credit and debit card transactions by more than $250 million this month, MPC said.
READ MORE +
Gifts and Decorative Accessories: Mastercard At it Again: Card Fees Going up $250 Million Despite Settlement
Almost immediately after agreeing to reduce “swipe” fees charged to merchants to process credit card transactions, Mastercard plans to increase fees for both credit and debit card transactions by more than $250 million this month, the Merchants Payments Coalition (MPC) said today. “This new increase proves the credit card companies are continuing to take advantage of Main Street,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said.
READ MORE +
Restaurant Business: Despite last week's reduction offer, Mastercard is increasing some credit-card fees
One week after Mastercard offered to temper the fees restaurants and retailers pay per credit card transaction, a group representing those merchants says it’s learned the financial giant intends to raise another charge it levies on business partners. According to the Merchants Payments Coalition, the credit card company is planning to increase what is known as an assessment fee to 0.14% as of April 15, an increase of one one-hundredth of a point. The higher charge would apply to both credit and debit payments made with a Mastercard, the Coalition said.
READ MORE +
CSP Daily News: Mastercard Plans to Raise Certain Credit, Debit Card Fees
“This new increase proves the credit card companies are continuing to take advantage of Main Street,” MPC Executive Committee member and National Association of Convenience Stores (NACS) General Counsel Doug Kantor said. “They made a show of ‘settling’ legal claims, but nothing in the settlement limits the fees that go directly to Visa and Mastercard. That leaves them free to continue to increase these fees and they are doing it already. The only answer is for Congress to pass the Credit Card Competition Act and bring fair market competition to the badly broken payments market.”
READ MORE +
Digital Transactions: Mastercard Plans a Network Fee Hike for Later This Month. Merchants Aren’t Happy
Not surprisingly, the fee increase is not being well-received by the MPC and its membership. “Merchants regularly see network fees increase and new ones raised,” says Doug Kantor, an MPC executive committee member and general counsel for the National Association of Convenience Stores. “Most of the industry does not see last week’s settlement as a victory as it has a loophole that leaves the door open for Visa and Mastercard to raise network fees, which this is,” Kantor adds. “There will be a lot of anger and frustration from merchants over this. This increase just reinforces the experience merchants have had that, when it comes to network fees, they lose.”
READ MORE +
News Ghana: Visa and Mastercard Swipe Fees Reached Record High
“Once again, Main Street merchants and consumers were hit with a new record for swipe fees in 2023,” said Christine Pollack, vice president of government relations for The Food Industry Association. “Last year, Visa and Mastercard fixed the banks’ prices to the tune of more than $100 billion in credit card swipe fees. That is an awful toll for Main Street businesses and their customers to bear.” U.S. merchants were charged $7.5 billion more for credit cards with Visa and Mastercard logos in 2023 than they were in 2022, the Merchants Payments Coalition said. Total swipe fees, including debit cards, topped $172 billion, compared to $160 billion in 2022. And of that figure, more than $132 billion in swipe fees were from debit and credit cards with the Visa or Mastercard logos, the coalition said.
READ MORE +
Wall Street Journal: Analysis: The Visa and Mastercard Settlement Doesn’t Put Fee Disputes to Rest
Some merchants want the ability to negotiate directly with the banks—not Visa and Mastercard—in a free-market environment where the banks have to compete with one another on setting interchange rates. “This settlement is a bad deal for merchants,” said Christopher Jones, an executive committee member for Merchants Payments Coalition, an industry trade group. Jeff Brabant, head of federal government relations at the National Federation of Independent Business, said the settlement isn’t enough and the issue needs to be addressed with legislation.
READ MORE +
Modern Retail: Proposed Deal From Visa & Mastercrd Causes Concern Among Retailers
Doug Kantor, general counsel for the National Association of Convenience Stores, said one of the issues with the settlement is it doesn’t address how Visa and Mastercard set the prices for swipe fees that are uniform across banks. This means businesses can’t price-shop the way they might for other vendors or expenses. “Merchants can’t differentiate and say, ‘Citibank, you’re too expensive, I want Wells Fargo or these other guys,'” he said. “They can only say ‘I’m going to take Visa and Mastercards or I’m not.” Kantor is an executive committee member of the Merchant Payments Coalition, which supports seeing legislation to help control swipe fees. He said some members of the coalition are already considering what they may have to do to challenge the settlement.
READ MORE +
Bloomberg Law: Visa, Mastercard Swipe Fee Deal Fails to Stem More Litigation
The proposed settlement is weak for merchants, given that it’s expected to save them $30 billion over five years, while US businesses paid more than $170 billion in swipe fees last year alone, said Doug Kantor, member of the executive committee of the Merchants Payments Coalition. The coalition is a Washington, D.C.,-based group of retailers advocating for competition in the payments market. Visa and Mastercard will continue to set prices for swipe fees charged to merchants each time a customer makes a purchase, and there’s nothing standing in the way of the companies raising them again after five years, Kantor said. “It’s very small and very temporary relief and then back to business as usual,” Kantor said. “The plaintiffs want a market that actually works and puts normal competitive pressure on fees.”
READ MORE +
NerdWallet: How the Visa-Mastercard Swipe Fee Settlement Affects Cardholders
The Merchant Payments Coalition, a CCCA proponent, counters that a temporary fee reduction leaves consumers and businesses hanging once the five-year period is over. “A few years of very small relief followed by business as usual is not a good outcome from 20 years of litigation,” said a statement from Christopher Jones, a member of the merchant coalition's executive committee and the National Grocers Association's senior vice president of government relations and counsel. “The settlement does nothing to actually bring competitive market forces to swipe fees or change the behavior of a cartel that centrally fixes rates and bars competition. Instead, it tries to provide token, temporary relief and then allows the card companies to raise rates yet again.”
READ MORE +