GS Logo
The Green Sheet, Inc

Please Log in

Banner Ad
View Archives

View PDF of this issue

Care to Share?


Table of Contents

Lead Story

Getting a bead on mobile merchants

News

Industry Update

Latest interchange increases - waving a red flag?

And the breach goes on

Durbin Amendment regs delayed temporarily

Durbin Amendment draws opposition

Ingenico gaining slice of U.S. market

Features

The experiences of an entrepreneur

Ken Musante
Eureka Payments LLC

Research Rundown

ISOMetrics:
The future of mobile payments

Selling Prepaid

Prepaid in brief

The secret to selling gift card programs

Metabank's cautionary tale

Views

ACH finds volume in consumer apps

Patti Murphy
The Takoma Group

What a bank core processor means to you

Brandes Elitch
CrossCheck Inc.

Circumvent cyber theft through education

Tony Griffith
Integration Specialist

Education

Street SmartsSM:
Spring cleaning the ISO house

Bill Pirtle
MPCT Publishing Co.

Smart phones, dumb habits

Dale S. Laszig
Castles Technology Co. Ltd.

Memorable ISO legal catastrophes

Adam Atlas
Attorney at Law

Old fraud schemes resurfacing?

Nicholas Cucci
Network Merchants Inc.

Company Profile

MagTek Inc.

New Products

An RDC solution for the Apple Mac

RDC Select for Panini I:Deal
Panini

Drive compliance with a PCI dashboard

MyPCIDashboard
Panoptic Security Inc.

Inspiration

Pause before you walk the tradeshow floor

Departments

10 Years ago in
The Green Sheet

Forum

Resource Guide

Datebook

Miscellaneous

2011 Calendar of events

Skyscraper Ad

The Green Sheet Online Edition

April 25, 2011  •  Issue 11:04:02

previous next

Latest interchange increases - waving a red flag?

MasterCard Worldwide recently released its spring 2011 changes to interchange rates and assessments. Included among them is an increase in the interchange rate for a widely used rewards card called the World Merit III, which for some retail merchants constitutes a large portion of their credit card volume, according to Phil Hinke, Founder of MLS Advocate LLC.

"World Merit III can be 20 to 30 percent of a retail merchant's MasterCard transactions," Hinke said. "So this increase could have a noticeable impact on a retailer's monthly processing costs."

Interchange hikes

Effective, April 15, MasterCard will increase the interchange rate for its World Merit III card from 1.73% + $0.10 to 1.77% + $0.10.

Also among the interchange increases disclosed by MasterCard were:

In addition, MasterCard will increase the assessment fee (a flat transaction fee added to the cost of processing each credit card sale) from 0.11 percent to 0.12 percent on consumer and commercial credit volume for transactions of $1,000 or more. For a complete list of interchange and fee changes released by MasterCard in April, please go to www.mastercard.com/us/merchant/support/interchange_rates.html.

Also in April, Visa Inc. reportedly added an Interregional Super Premium Card with a rate of 1.97% + $0.00 and four new Interregional Full Chip Cards with an interchange rate of 1.10% + $0.00. All of the new cards also have the 0.40% and 0.45% international service and acquirer fees associated with them.

Mixed reactions

Announcements about interchange increases typically meet with different reactions, depending on who is hearing the news.

Hinke, whose firm provides independent interchange statement analyses for merchant level salespeople, works only with sales agents who use an interchange plus approach to pricing. He considers information on interchange rate increases a sales tool.

"I educate my salespeople to go to their merchants and say, 'Because you are with us, and you are on interchange plus, you'll be getting a fair rate increase,'" Hinke said. "'You don't have to worry about us giving you a wholesale increase across all card types ... the only prices that will change are on the specific cards that MasterCard or Visa changes.'"

Potential merchant ire

Brandes Elitch, Director of Partner Acquisitions at CrossCheck Inc. suggested raising rates on credit card interchange could be tantamount to waving a red flag in front of merchants, who have already gained traction in their battle to reduce interchange rates on debit transactions via the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

He anticipates that merchants, already "smelling blood" because of legislative progress made toward implementation of debit interchange caps, may soon turn their ire on credit card interchange.

"I think why these rates are important is that every time MasterCard or Visa raises their interchange, it's a poke in the eye to the top 200 retailers - and really all retailers," Elitch said. "And they are bound and determined to get caps on these rates. After the dust settles on Durbin with debit card caps, that won't be the end of it. The top 200 retailers will then go to their legislators for caps on credit card transactions."

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

previous next

Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | IRISCRM.COM | Humboldt Merchant Services