Visa Posts Merchant Interchange Fees on Web Site

By Tim Castleman

In response to merchant demands for greater transparency in credit card interchange fees, Visa USA has posted a five-page document showing fee schedules for different types of merchants (found here). While the document won’t tell new merchants the exact interchange fees to expect, it does provide a guideline, and the document allows existing merchants that accept Visa to see how the specific rates they pay stack up to the published rates. Much of this information was available to merchants in the past, but certain groups have complained that Visa and MasterCard are raising rates to unreasonable levels, and they believed that having the rates publicly available would help their case.

Interchange fees are the fees that merchants pay in order toaccept credit cards. These fees go to processors such as Visa, MasterCard, American Express and Discover, as well as to the financial institution that issue the cards used. Fees usually range from 1% to 3% of each credit card transaction. While buyers do not notice this, it means that for every dollar consumers charge on a credit card, the merchant gets 98 cents or so after interchange fees are subtracted.

As reported previously, merchant groups have been pushing Congress to step in and regulate the fees they can be charged, saying that the card processors are colluding to keep fees higher than necessary. Visa’s publication of interchange fees on its Web site, which follows a similar move by MasterCard, may be a response intended to show Congress that further regulation is not needed.