Magazine article American Banker

Visa Launches Interlink with Aggressive Pricing

Magazine article American Banker

Visa Launches Interlink with Aggressive Pricing

Article excerpt

Visa Launches Interlink With Aggressive Pricing

NEW YORK -- Visa U.S.A. on Thursday positioned its newly acquired Interlink point-of-sale network as a low-cost alternative for merchants who accept credit and debit cards.

In announcing a pricing structure for Interlink -- recently purchased from four large California banks -- Visa made it clear that retailers will pay less when they accept Interlink cards than when they take traditional Visa credit and debit cards.

Visa hopes to turn Interlink into the first nationwide point-of-sale system for direct debit cards. Such systems instantly debit checking accounts when consumers pay for items on their cards.

Aimed at High-Volume Merchants

Banks, thrifts, and card associations that join Interlink will market the system to supermarkets, gas stations, fast-food restaurants, and other high-volume merchants. The fees the merchants pay a bank to process card transactions are influenced by so-called interchange rates -- which the processors pay to the banks that issue the cards.

The pricing system unveiled by Interlink Thursday sets relatively low interchange rates, which in turns means low fees for retailers. Banks that process most Interlink transactions will pay the card-issuing bank 0.45% of each sale -- 80 basis points less than the average 1.25% they pay on Visa credit and debit card sales.

Banks that process transactions for supermarkets will pay a flat fee of 10 cents for each Interlink sale. …

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