Visa Postpones U.S. Interchange and Fee Changes Until 2021

Jun 19, 2020

Interchange and fee changes are placed on hold to help the digital payments industry.

Due to the massive disruptions of businesses caused by the COVID-19 pandemic, Visa made the announcement that they will delay the increase in credit card “swipe fees” until the following year, in April 2021. However, it will continue to move forward with its efforts to lower the interchange fees for in-store transactions that take place in supermarkets in July. 

Visa announced in a statement:

“At Visa, we remain steadfast in our commitments to employees, clients and communities as the COVID-19 pandemic continues to impact our world in unprecedented ways. We believe this is the right decision to ensure the long-term stability of the digital payments ecosystem.”

Back in March, both Visa and Mastercard were set to announce a new fee structure, however, that too was postponed until July, amid the COVID-19 situation.

American Express Co. as well as Discover Financial Services have also jumped onboard, postponing many of their pricing changes. 

Visa Postpones EMV Chip Liability

In addition, Visa’s deadline for U.S. convenience and fuel operators to update their fuel dispensers to take EMV chip as well as for contactless payments was moved to April 2021 as well.  American Express has also agreed to postpone the EMV fuel pump capability to April. Mastercard and Discover have yet to announce if they too will delay the requirement. This means that gas station owners will be responsible for all “counterfeit fraud losses” if pumps are unable to read the EMV chip.  

Although Visa is confident that implementing EMV chip technology is critical to reducing fraud, they also understand how the global pandemic has caused serious disruption in the supply chain and also challenges with staff.

Convenience stores, gasoline owners, and merchant groups have been voicing their concern appealing to Visa to hold off on the liability shift that was originally going to take place in October. The economic downturn has only added more problems and complications in all the efforts to shift to this new capacity. 

More Fees Waived

Visa has also agreed to waiving any COVID-19-related dispute fees. Disputed transactions have skyrocketed due to cancelled flights, hotel stays, and events. Visa hopes to support their clients by foregoing these fees. 

The Merchant Advisory Group, which is an association of merchants that deal with payment issues, applauded Visa’s decision. MAG chief executive John Drechny expressed in a statement:

“This is positive news for the merchant community as it gives them needed relief from incremental expenses of accepting payments. We appreciate Visa hearing the concerns from the merchants and moving in a direction which provides relief. We will continue to work with Visa and the other networks to help them understand the continued pressure businesses face and develop solutions which will help alleviate this pressure.”

Visa Answering The Call For Help

Visa has announced its continued support to those directly affected by the COVID-19 pandemic. Earlier in April, the Visa Foundation made the announcement that it was committed to two programs. These two programs had a combined financial resource of $210 million in an effort to assist both small and “micro businesses”. These funds will also be made available to address any urgent needs within local communities in the aftermath of COVID-19.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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