VISA Changes Interchange Structure

SAN FRANCISCO – VISA USA has done more tinkering with its interchange rates in the wake of the settlement of its anti-trust case with retailers. As part of that settlement, both VISA and MasterCard agreed to cut their debit interchange rates. But in its announcement of the debit interchange rate cuts, which MasterCard scheduled to go into place August 1, the VISA competitor, based in Purchase, New York, also raised some other types of interchange that it charges. Both VISA and MasterCard’s average merchants will pay 1.43% plus 10 cents for each credit transaction, but VISA’s highest volume merchants will get a cut to paying 1.39% plus 10 cents for each transaction. High volume supermarkets will still only pay 1.20% per transaction, versus 1.25% for lower volume grocery stores. Significantly, online merchants that use Verified by Visa will also get a cut. Verified by Visa users will continue to pay the lower 1.80% plus 10 cents on their Verified transactions, whereas other online merchants will face a 1.85% plus 10 cents rate. The card associations have long charged the highest interchange for online transactions, citing increased security costs.