MasterCard to limit interchange fees from gas retailers
MasterCard has announced plans to establish a limit for interchange fees paid by gasoline retailers. Additionally, MasterCard will publish a complete list of interchange rates.
Interchange fees are what credit card networks charge retailers for processing transactions each time a customer pays by credit card or debit card. The fees are ultimately passed on to consumers through higher prices. Merchants have expressed unhappiness over interchange fees, which they tend to consider a growing cost over which they are powerless. Recently, a number of retailer group filed class action suits targeting MasterCard, Visa and some major banks over interchange fees.
In making its decision, MasterCard noted that the moves are an attempt to address concerns raised by merchants. While it did not offer details, MasterCard did note its actions would "include publishing all the MasterCard interchange rates that apply to U.S. merchants," as well as placing "a cap on interchange fees on fuel purchases at petroleum retailers."
MasterCard explained that merchants requested transparency surrounding interchange rates, and that due to the unique structure of the petroleum distribution business, gasoline retailers are disproportionately impacted by high oil prices.
MasterCard said that the fee limit for gasoline retailers will provide benefits to gasoline retailers on fuel purchases of $50 or more made with consumer credit cards or debit cards. This cap could cut interchange fees by up to 21 percent on a $60 transaction, according to the company.
MasterCard expects to post interchange rates at www.mastercardmerchant.com (which currently offers merchants access to the MasterCard rules manual) on or prior to Nov. 1, 2006.
- Yes, merchants can get new card info on recurring charges – Updater services allow merchants to know when your credit card information changes, and to alter their records accordingly. If you don't want to continue the subscription, you'll need to cancel it directly ...
- EMV holdouts: Why merchants are slow to make chip-card switch – With the EMV liability switch coming in October, many merchants are still in the dark on what is required of them ...
- Is it time to negotiate a new merchant account? – Some business owners stick with a merchant services account they secured as a startup, but that now costs them more than they should be paying ...