Mastercard and Visa are two of the biggest financial services in the world and they are both right on the edge of hiking the fees they charge to merchants who accept credit and debit cards. These new fees could be introduced as soon as April.
While credit card payment service giants are both anticipating the move will help them move further line their financial coffers, merchants will most likely look elsewhere. Specifically, merchants could be looking to the crypto space due to the Bitcoin payments being a lot cheaper to process.
A few members of the community were looking at the happenings and noted how merchants stand to gain from the hiking of these fees.
Some of the changes relate to the so-called interchange fees. Interchange fees are what merchants pay to banks when consumers use a credit or a debit card to make purchases.
“Up to 2.5% of prices for goods and services go to cover card fees. It’s up to the merchant to decide whether to pass along these fees to their customers.” In many cases, they do through the increasing prices for their goods or services. In addition to this, they can require customers to make minimum purchase amounts.
Both companies have said both said in the past that their credit and debit cards usually result in more sales for merchants. But this was then.
In 2018, both the payment services were among the financial institutions that had to pay $6.2 billion to settle a lawsuit which was brought by merchants who accused them of violating federal antitrust laws. Both of the payment behemoths forced merchants to pay for the swipe fees and prevented them to direct consumers toward other methods of payment according to the lawsuit.
Critics take issue with the gall of the pair to even consider raising fees.
Not a really well thought out strategy to increase interchange fees. Why has the current fee not been lowered since no technological advancements have been made in our archaic system?https://t.co/god4wXzjmf https://t.co/SYDMVBSSHf
— JBall (@jonathanball) February 15, 2019
With the hiking fees for merchants by Mastercard and Visa, it’s safe to say that most merchants will be looking elsewhere and the crypto space could be the perfect place.