Visa and MasterCard Interchange Fees Rise

From: cbsnews.com

Date: 4-25-2005

Brief Article Summary:

• A steady string of increases in Visa and MasterCard interchange fees is driving up costs for consumers, and another increase is scheduled to go into effect today, according to the National Retail Federation.

• Both Visa and MasterCard have announced interchange increases that are scheduled to take effect April 1. An average is difficult to calculate because of the complicated fee structure, but the increases range from 2.7 percent for Visa Consumer Standard Credit to 9 percent or more on typical retail purchases for MasterCard Corporate Face-to-Face transactions, according to NRF.

• Interchange is a percentage of each transaction -- sometimes accompanied by a flat fee -- that banks collect from retailers every time a credit card or debit card is used to pay for a purchase, adding up to billions of dollars each year. Concern over rising interchange rates has risen to the level that the Federal Reserve Bank of Kansas City has scheduled a conference on the issue to be held in May.