WASHINGTON–The Merchants Payments Coalition, which represents large merchants and retailers, said that even as Mastercard has recently agreed to reduce swipe fees as part of a court settlement, that it has seen documents that the card company plans to increase fees for both credit and debit card transactions by more than $250 million this month.
“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. “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.”
The Credit Card Competition Act is adamantly opposed by credit unions and other financial institutions.
What’s Purportedly Planned
According to the MPC, Mastercard plans to increase its Acquirer Brand Volume Fee – which applies to all credit, debit and prepaid card transactions and is also known as an assessment fee – from 0.13% to 0.14% beginning April 15, according to documents seen by MPC.
“Based on Mastercard’s $2.591 trillion in transactions on those cards during fiscal 2023, that would amount to an annual increase of $259.1 million,” the MPC said. “Visa and Mastercard are increasing other fees as well, but sufficient information is not available to calculate the dollar amount of those increases.”
‘An Unending Pattern’
The merchants group called the increase “part of an unending pattern.”
“Visa and Mastercard combined have raised or created new fees that go directly to them at least 40 times since 2011 alone,” the MPC continued. “The Mastercard assessment fee increase would be the third round of hikes in various combinations of interchange fees and network fee rates in as many years. Visa and Mastercard raised fees by $1.2 billion in April 2022 despite pleas from bipartisan members of Congress not to do so because it would contribute to inflation. Last October, they raised fees by $502 million, according to payments consulting firm CMSPI. That, too, came despite requests from Congress to withdraw the increases. This month’s action would bring total swipe fee rate increases to nearly $2 billion over the past three years.”
CUToday.info has coverage of the recent $30 billion settlement over swipe fees by Visa and Mastercard here.
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