Visa and Mastercard are planning to raise swipe fees in April, according to media reports. It could result in higher prices for consumers.
Visa and Mastercard are planning to raise swipe fees in April, according to media reports.
The Wall Street Journal on Feb. 15 reported the two payment networks are planning changes that would raise interchange fees – which merchants pay to process consumers’ Visa and Mastercard payments. A hike in interchange fees could mean higher prices for cardholders, as merchants pass on the increased costs to consumers.
Swipe fees for credit card transactions vary by purchase amount, but they average 2 percent of the total. Federal law caps debit card swipe fees at 21 cents per transaction.
The companies are also planning to hike fees that banks pay to process card payments on behalf of merchants.
See related: Credit card surcharges grow more common
Swipe fees have long been a point of contention between the payment networks and retailers. In a 2005 lawsuit, merchants alleged the fees are too high and violate antitrust laws.
A 2012 settlement allowed retailers to impose up to 4 percent in surcharges to cover the swipe fees, but they largely didn’t follow suit, and the settlement was ultimately thrown out by an appeals court.
Last year, Visa and Mastercard agreed to pay merchants up to $6.2 billion in damages to settle the dispute, but the agreement did not address the networks’ interchange fee policies.