No Visa Credit Interchange Fee Hikes in April

T he Green Sheet has learned that Visa will not raise interchange rates for credit card transactions in April. The company did raise fees for Interlink debit transactions in March: For supermarkets, the rate rose from $.15 to $.22, and the standard rate went from .45% + $.03 (maximum of $.20) to .65% + $.12 (maximum of $.45).

Visa will be making changes in credit processing regulations and interchange fees beginning in October 2002. Visa determined that some credit transactions were incorrectly processed at rates higher than the original sale, which it says created an inequity among acquirers. Visa intends to re-evaluate new credit Interchange Reimbursement Fees (IRF) annually and adjust as needed, but rates are not expected to be changed frequently.

To minimize the variance between the original sale and a subsequent credit, as well as to create a level playing field, Visa will introduce the new rules for processing credit transactions effective Oct. 5, 2002. The new rates will apply to all transactions regardless of the merchants' Merchant Category Code (MCC) or how the original transaction cleared.

Visa interchange rates for credit transactions will also be modified effective Oct. 5, 2002. All passenger transport cards will increase by 1.9%. Non-passenger transport consumer card rates will increase by 1.59%, and fees for non-passenger transport commercial cards will go up by 2.14%.

This IRF structure will not apply to large General Services Administration (GSA) transactions or to commercial emerging market credit transactions, both of which will qualify for the same IRF rate as the original transaction. The rate will apply to all other Visa credit transactions regardless of how the original transaction was cleared.