Price hike, ahoy: Visa, Mastercard merchant fee increasing in April 2022.
Earlier this month, The Wall Street Journal reported that Visa and Mastercard were finally gearing up to impose a long-delayed increase in the fee paid by merchants when consumers/patients pay using credit cards. The fee increase is said to go into effect in April 2022, which is right around the corner.
Here’s everything you need to know about the change.
Visa and Mastercard have been planning fee changes for over two years now. These changes were, just like everything else, delayed due to the coronavirus pandemic. Interchange and transaction fees play a critical role in helping credit card networks and issuing authorities for various reasons – the most prominent of which include ensuring security and fraud protection, innovation and implementation of new features, and funding the countless different rewards programs offered.
Credit card networks may have their rhyme and reason, but the news does not sit well with most merchants across the United States. According to the Nilson Report, Visa and Mastercard made a whopping $55.39 billion in merchant fees in 2021, which is more than double of what the amount was reported for the year 2012.
To counter these costs, some companies have started charging customers an additional fee when they opt to pay using their credit cards.
Relevance to the Healthcare Industry:
According to a 2019 survey, 56% of credit card users in the United States paid their medical bills for the year using a credit card. LendingTree predicts that the numbers may continue going up as millennials are twice as likely to use the same payment methods for future healthcare bills, as compared to their previous generation.
Business Insider has predicted that US consumers/patients will be spending $2385 billion for in-office/in-store payments with POS devices using their credit cards in 2023, and $562.14 billion in online credit card payments.
Merchant Fee Exceptions:
Mastercard and Visa have issued statements regarding the exceptions that they may be making for certain merchants once the price hike goes in effect. Visa will be lowering the fee for merchants who have $250,000 or less in annual consumer credit card volume, whereas Mastercard will do the same for merchants with transactions below $5.
Both companies have deferred the fee hike for nearly two years now since it was first announced in 2020, and are finally set to implement it in April.