Visa and Mastercard are reportedly on the cusp of hiking fees they charge merchants who accept credit and debit cards.
They could hike the fees they charge merchants as early as April, according to the Wall Street Journal.
While the behemoth credit card payment processors anticipate the move will help them further line their financial coffers, merchants could be chased away. In the wings waiting for them is the crypto space, where Bitcoin payments are a lot cheaper to process.
A few observers of the happenings told ODEYBIT about how merchants stand to gain from these looming higher fees.
UNRELENTING FEES COULD BACKFIRE
Some of the changes relate to so-called interchange fees. Interchange fees are what merchants pay to banks when consumers use a credit or a debit card to make purchases.
Up to 2.5% of prices for goods and services go to cover card fees, according to the WSJ. It’s up to the merchant to decide whether to pass along these fees to their customers. In many cases they do. This is done by either hiking prices for their goods or services. Also, they can require customers to make minimum purchase amounts.
Reuters reported that card companies have said in the past that their credit and debit cards usually result in more sales for merchants. The key word here is the “past.”
Such language was largely bandied about during the pre-Bitcoin era.
Merchants around the world have already been in battles with these processors over interchange fees.
Last year, Mastercard and Visa were among the financial institutions that had to pay $6.2 billion to settle a lawsuit brought by merchants who accused them of violating federal antitrust laws. The giants forced merchants to pay swipe fees and prohibited them from directing consumers toward other methods of payment, the lawsuit claim.
Critics take issue with the gall of the pair to even consider raising fees.