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Mastercard to Increase Credit Card Fees Despite Recent $30 Billion Settlement

By  |  April 3, 2024

Mastercard Inc. has announced plans to hike certain credit card fees starting April 15, just days after the company, alongside Visa Inc., reached a $30 billion settlement over swipe fees. Bloomberg reports that the move comes despite efforts to provide relief to retail businesses.

The card company intends to raise its network “assessment” fee from 0.13% to 0.14%, translating to a projected annual increase of $259.1 million. The figures are based on Mastercard’s transactions, which surpassed $2 trillion last year. These details were disclosed by the Merchants Payments Coalition, a group of retailers in Washington advocating against higher payment fees. Documents shared with Bloomberg Law revealed the impending fee hike. Retailers argue that any fees levied on banks eventually trickle down to them.

Related: Credit Card Competition Act Puts Merchants, Not Consumers, in Charge of Card Rewards and Payments Security Decisions

Assessment fees, applied as a percentage on each transaction involving a Mastercard or Visa, are distinct from swipe fees, also known as interchange fees, which are paid to the issuing bank. The recent settlement with Visa and Mastercard encompassed swipe fees and pledged to cap them for five years, potentially saving retailers approximately $30 billion. This move aimed to mitigate ongoing litigation spanning decades, according to Bloomberg.
Despite the landmark settlement, numerous merchants plan to proceed with litigation against Visa and Mastercard, alleging collusion regarding credit card fees. Their aim is to secure monetary compensation despite the recent settlement’s provisions.