Mastercard and Visa are preparing to raise the fees paid by merchants when consumers pay with credit cards, The Wall Street Journal (WSJ) reported Tuesday (March 8).
The fee increases are set to go into effect in April, according to the report. They had been scheduled to happen two years ago but were put on hold during the pandemic. Most of the increases will come from higher interchange fees, which are paid by merchants to the card-issuing banks when shoppers use cards.
Interchange fees have been a consistent thorn in the side of merchants, especially as they’ve seen their costs go up in recent years amid the popularity of rewards credit cards, which often come with higher fees to offset the cost of benefits, such as travel perks.
These fees have been in the antitrust spotlight for years, with most of the cases in the United States being closed via settlements. Still, the legislative and judiciary decisions in Europe and the United Kingdom underline how tough it will be for retailers to resolve the situation.
It hasn’t kept them from trying. Last month, a collection of U.S. retailers, via the Merchants Payment Coalitions asked the Federal Trade Commission (FTC) and the Department of Justice (DOJ) in a letter to investigate credit card fees.
That letter came after Amazon reversed its decision in the U.K. to ban Visa cards in its network because of the high fees charged by the card company.
“We believe U.S. authorities should look closely at what Amazon has done in the U.K. and need to be aware that many retailers here feel the same,” the letter stated. “Despite the reversal, Amazon’s move shows how frustrated even the largest retailers are over skyrocketing swipe fees, and the situation is even worse for small retailers.”
Mastercard and Visa said the ability to accept card payments helped businesses survive the pandemic, and the fees have helped cover costs connected to innovation and fraud prevention according to the WSJ report.