But you can avoid or offset this increase.
Background:
If your business accepts credit card payments, you pay a variety of fees every time you process a transaction.
One of these is called an interchange fee.
Interchange Fees do not go to your processor … they go back to the bank that issued the credit card to your customer.
In April, Visa made some unexpected changes to the rates they charge, primarily affecting business interchange fees. This has the potential to bring a 20% overall increase in processing fees, for many businesses.
Mastercard, Discover and American Express instigated similar fee updates at the same time.
Impact:
How much will this increase your processing fees?
It depends.
Companies that accept a higher percentage of B2B transactions (meaning your clients are businesses), or using specific business Visa cards, should expect an increase based on this volume.
On average, these merchants will see a 20% increase.
But everyone is likely to see some amount of fee increases this year, no matter what.
Mastercard has made similar moves recently, and AmEx is expected to do so in the near future.
What can be done?
To offset these increases, adjustments will need to be made on the back end of your merchant account, which protect your fee structure for the coming changes.
These will be different for every business, and depend on a number of factors.
To determine the best approach for your merchant account, we offer a no-charge merchant account analysis.
You can request that here.
Or submit the form on this page to gauge the impact of this change.
Financial Impact Worksheet
How will this impact your business? We can tell you.
We just need to know a few things first:
Additional Details
As always, expect these increases to be complicated and opaque. Here are some things to watch for:
Standard Interchange Increase Levels:
- The card types most affected by this will be: Visa Signature B2B and Infinite B2B, Visa Level 2 Business Tier Cards, and
- As a basic example: when you process a customer’s payment of $1000, the Standard Visa fee will go up from $29.50 to $31.50
- The same $1000 transaction on a Visa Business Card would see a fee increase from $25.00 to $30.00
- THESE EXAMPLES REPRESENT THE SIMPLEST LEVELS OF THE INCREASE SCHEDULE … IT GETS MUCH MORE COMPLICATED
How Your Processor Will Respond:
- Whenever Visa or Mastercard increase Interchange Fees, Processors tend to increase their fees at the same time
- They do this because you are already expecting an increase
- So, they think you won’t notice a little bit extra going out the door
- And they rarely make this clear or obvious
- Note: some Processors are more up-front and fair than others … if you use one of these Processors, kudos. They are rare.
- But even a fair processor will not address the Interchange Fee increase on your behalf
Plan of Action:
- Most merchants believe Interchange cannot be reduced
- This is incorrect
- Depending on your mix of card and transaction types, there are a number of steps that can be taken to avoid or offset increases like this
- Contact Verisave to determine the best plan of action
