NEW YORK—A new report suggests Visa and Mastercard are planning to raise swipe fees for some types of credit-card purchases in April. If so, it will add to the squeeze felt by restaurants, retailers and other merchants already struggling through the COVID-19 pandemic, according to the report.
What’s more, the move by consumers to online shopping during the pandemic—a trend heralded for keeping many businesses afloat when people are reluctant to venture inside stores—is also creating extra costs for merchants, the report states, because swipe fees are often higher on online purchases, The Wall Street Journal reported.
“Swipe fees…are a perpetual source of contention between merchants and card companies. Though invisible to consumers, they are glaring to merchants, which often end up paying fees of about 2% of their customers’ credit-card purchases,” The Journal noted.
Cash use as a share of U.S. payments has been declining for years, but merchants told the publication COVID-19 has accelerated the shift. Even customers who are shopping in stores are shunning cash during the pandemic, which also means more swipe fees for businesses, The Journal added.