PURCHASE, N.Y.–In a development that will only complicate a difficult legislative battle credit unions are waging on Capitol Hill, Visa and Mastercard have indicated that plan to increase the fees merchants pay to process credit cards.
The fee increases are scheduled to start in October and April, according to people familiar with the matter and documents viewed by the Wall Street Journal. Many of the increases are for online purchases, the report stated.
The changes could result in merchants paying an additional $502 million annually in fees, CMSPI, a consulting company that works with merchants, told the Journal. The report added that increases in network fees will make up a little more than half of that revenue, CMSPI estimated, with the rest coming from increases in interchange fees.
U.S. merchants paid an estimated $93 billion in Visa and Mastercard credit-card fees last year, according to the Nilson Report data cited by the Journal.
A Top Priority
That development comes as credit unions have said their top Washington priority as Congress returns in September is to stop the passage of the Credit Card Competition Act, which seeks to give merchants options in routing card transactions and which is strongly supported by merchants and retailers.
One of the bill’s primary co-sponsors, Sen. Roger Marshall (R-KS), has vowed to bring the legislation to a vote in the current Congress.
‘Bad Combination’
Doug Kantor, general counsel of the National Association of Convenience Stores, told the Journal that many businesses are already being hurt by inflation and high interest rates, or still recovering from the pandemic.
“It’s just a bad combination and bad timing for any of these fee increases to happen,” Kantor was quoted as saying.
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