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Visa and MasterCard are mulling increasing interchange fees (which merchants pay to issuing banks) as well as fees that card networks charge financial institutions for processing card payments for merchants. Though merchants are broadly unhappy with the potential development, the cost is typically passed on to the consumer.
Merchants often increase the prices consumers pay following such fee increases, in an attempt to protect their own profits. Roughly 1% to 2.5% of prices for goods and services go to cover card fees, according to people familiar with merchant pricing. Consumers often pay for those fees whether they pay with cash or card. While big in the aggregate—merchants pay tens of billions of dollars in card fees annually—per-transaction changes are often minuscule and so go largely unnoticed by consumers. A Visa spokeswoman said “Visa’s network fees are paid by our financial institution clients and used to enhance the safety, efficiency and innovation of our platform, and are set based on market conditions and to reflect the value we deliver.” She said the new price changes impact fees that Visa hasn’t adjusted in at least three years.
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