US card networks Visa and Mastercard are mulling plans to increase fees for payment processing.
This was reported by the Wall Street Journal.
Go deeper with GlobalData
Under the move, card networks might increase interchange fees, which merchants pay to banks when consumers make purchases with cards.
According to the report, card networks might also raise the fees imposed on financial institutions for processing payments on behalf of merchants.
The move is said to be effective from this April for merchant banks.
Card networks often raise prices on the pretext of enhanced security controls and claim that cards translate to increased sales.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataHowever, this in turn results in price rise. Furthermore, this is usually done in such cases by merchants to cover the extra expenses.
Card fees are said to constitute around 1% to 2.5% of prices for goods and services.
In September 2018, Visa and Mastercard along with a group of US-based banks agreed to pay $6.2bn to settle a dispute on card fees charged to merchants.
The banks involved in the settlement include Citi and JPMorgan Chase.
Recently, Mastercard and Visa agreed to reduce fees paid by merchants for accepting debit or credit cards issued outside the EU.
The move is in response to an antitrust probe by the European Commission.
