Recently you may have heard that Visa™ is having a rate increase for the first time in 10 years. I must disagree with that statement. If you’re on an interchange plus program for credit card processing, Visa™/MasterCard™ change the rates on various card types almost twice a year. This doesn’t include increasing and adding new fees specific to their card brands. If you are on a qualified pricing program, these increases are the reason your processor uses for raising your rates across the board every year. They may not have even affected you as most of the recent increases were on corporate cards.
The actual increase that may affect you came in May and it’s supposed to be specific to card not present transactions. This means the cards you key in from your patients or take online. According to Bloomberg News, “With Visa’s changes, the interchange rate for so-called card-not-present transactions, which include those made online or over the phone, will increase. For a traditional Visa card, the fee on a $100 transaction will climb to $1.99 from $1.90. For premium Visa cards, the fee will rise to $2.60 from $2.50.” To read the article from Bloomberg News, go to https://www.bloomberg.com/news/articles/2020-02-04/visa-is-planning-the-biggest-changes-to-swipe-fees-in-a-decade.
If you’re on an interchange plus program and you don’t do card not present transactions, you shouldn’t see an increase. All other types of pricing structures will be vulnerable to huge increases because of the profit potential that this type of news creates. If everybody has heard about it, it must be true!
Remember that you can do your own research to see if what your processing company is telling you on your statement is the truth. This information is available online with a simple search or you can just call us.
You may have seen an increase in the American Express™ & Discover™ assessment fees in May, even though the actual increase goes in to effect in July 2020. This increase is only 0.01% which translates to $1 per $10,000 in processing. If you see that you’re being increased more than this, the overage is profit in your processors pocket.
The reason we point all of this out to you is that typically processors use every excuse to raise your rates. When given a publicized “huge” increase, the sky’s the limit and they can charge you whatever they want. Last year we saw companies do huge increases right after they were sold to bigger processors. Did you have a big increase last year? There wasn’t one across the board but that didn’t stop a lot of companies from implementing one then and it won’t stop them from doing it now. As always, we will be passing along the card brand mandated increases but will not be raising our merchant’s rates across the board. What is your processor going to do? Be sure and read your statement message because they must alert you at least 30 days in advance of any increase going into effect.
Image: Hloom via Flickr / CC BY-SA, 401(K) 2013