Visa has announced it will be lowering credit card interchange rates or swipe fees for both online and in-store transactions by 10% for small businesses, according to an AP report.
Visa Will Lower Credit Card Swipe Fees for Small Business
The lower fees begin in April, with Visa hoping they will help maintain their status as one of the world’s largest payment companies. While the pandemic increased Visa’s market share of the digital payments sector due to more people shopping online and more places accepting cards, more and more tech firms are introducing alternative forms of payment that bypass traditional credit and debit card networks.
Visa Criticized for Rate Hikes
The credit card interchange rate reduction for small businesses has come as a response to protests at Visa’s plan to actually raise the rates, also known as swipe fees. Both Visa and Mastercard had originally wanted to raise the rates last year but delayed the move because of the pandemic.
As a concession to complaints about rate hikes as inflation increases, Visa agreed to lower some rates for small businesses, along with businesses in the travel and day care industries.
Fresh criticism of the concession was led by the Merchants Payments Coalition, who believe the swipe fee reductions affect too small a sector and will do nothing to help the vast majority of retailers coping with soaring inflation.
Visa Vague on Small Business Definition
Visa themselves have stated that the swipe fee reduction should affect ‘90% of businesses’, but notably did not specify how they are defining small business.
Details remain thin on the ground, although new agency Reuters reported that the rate reduction will apply to merchants with $250,000 or less in Visa consumer credit volumes.
Current Visa Swipe Fee Rates
Consumer credit card interchange rates are fees that every merchant must pay with every credit card and debit card transaction. Visa currently charges 1.5% to 2.4% for all consumer credit card interchange rates.