Magazine article American Banker

New Charges for Merchant Acquirers from Visa and MC

Magazine article American Banker

New Charges for Merchant Acquirers from Visa and MC

Article excerpt

Byline: Kevin Woodward

Visa Inc. and MasterCard Inc. are planning to introduce new fees for merchant acquirers as part of their updated rate schedules.

Beginning April 18, MasterCard will collect a network access and brand use fee of 1.85 cents on each transaction, but it will lower its acquirer access fee by half a cent, to 0.15 cents an authorization.

Beginning July 1, Visa will charge a U.S. acquirer processing fee of 1.95 cents for each transaction, according to information some acquirers are distributing to their sales agents.

Neither company has imposed such fees in the past.

Greg Cohen, the president of Moneris Solutions U.S. in Schaumburg, Ill., predicted that acquirers will likely increase the fees they charge merchants.

"Most, if not all, acquirers will pass these increases along to merchants," Cohen said in an interview Wednesday. The fees are "too steep to try and absorb." He would not say how Moneris plans to handle the fees.

Sam Caine, the president of the Frisco, Texas, acquirer Card Payment Services Inc., said the new fees will be paid to the card companies, rather than issuers. "The only difference" between these charges and other fees "is who gets the money."

Card Payment Services' large merchant clients are likely to see the fees as line items on their statements, he said, and the charges will be incorporated into other pricing models for small merchants.

The Food Marketing Institute, a merchant trade group, is unhappy with the new charges.

"These new fees are like putting salt in an open wound," Jennifer Hatcher, group vice president of government relations at the group, wrote in an e-mail Wednesday.

The Arlington, Va., trade group is a member of the Merchants Payments Coalition, a Washington coalition that opposes what it has called "unfair" credit card fees. …

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