Two of the biggest card networks in the U.S. are scheduled to hike card processing fees. The move comes at a time when there is growing push towards a cashless economy.
The Wall Street Journal has reported citing sources familiar with the matter at hand as saying, Mastercard Inc and Visa Inc, are moving to increase certain fees levied on U.S. merchants for processing transactions, sometime this April.
The coming hike in processing fees by two of the biggest U.S. card networks will be in the so-called interchange fees. These are essentially fees paid by merchants to banks when consumers use a credit or a debit card to make a purchase from their store.
According to the WSJ report, Visa and Mastercard are also slated to increase the amounts they charge fo financial institutions, including banks, for processing card payments on behalf of merchants.
Visa and Mastercard did not immediately to a request for comment.
Typically, merchants pass on this hike in fees to consumers, so as to protect their own profits. As per the report, the card networks are slated to hike up to 2.5% for processing prices for goods and services.
In the past, Visa and Mastercard have stated, their credit and debit cards usually result in more sales for merchants.
One of the reasons for the fee hike, they say, is the jump in expenses for anti-fraud/theft security measures they have had to undertake to make payment processing safer.
Recently, Mastercard and Visa, along with several U.S. banks, have had to pay more than $6 billion to settle a lawsuit brought by merchants who had accused the credit card companies of violating federal antitrust laws by forcing merchants to pay swipe fees and prohibiting them from directing consumers toward other methods of payment.