Magazine article American Banker

MasterCard Sets April Interchange Hikes

Magazine article American Banker

MasterCard Sets April Interchange Hikes

Article excerpt

MasterCard International said it will soon raise the interchange rates that card issuers can charge to merchants in some of its 2003-04 consumer and corporate programs for its U.S. region.

The increases will go into effect April 4, according to a Jan. 3 bulletin sent to financial institutions, processors, and retailers.

It is too early to tell whether the move will trigger a round of hikes from Visa U.S.A. and the electronic funds transfer networks such as Star Systems, the NYCE network, and Pulse EFT Association.

Last year Visa U.S.A. announced increases after MasterCard did. MasterCard and Visa interchange rate hikes can put pressure on the EFT networks to increase their rates to remain competitive and keep banks happy.

The MasterCard bulletin said the consumer programs to be affected are the consumer standard, Merit III, and supermarket programs. The increases will apply to transactions initiated with cards including MasterCard's standard and debit cards, its gold charge and debit cards, its platinum card, and the World MasterCard.

The rates include 10 cents plus a percentage of the transaction amount. The percentage will rise 11 basis points, to 2.65%, in the consumer standard rate; 2 basis points, to 1.40%, in Merit III; and 5 basis points, to 1.20%, in the supermarket rate.

On the corporate card side there will be about a half-dozen increases, ranging from 2 to 15 basis points. Those apply to business, purchasing, fleet, corporate executive, travel, and government cards. …

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