Visa, Mastercard to increase fees for US merchants

Visa Inc and Mastercard Inc, the two biggest US card networks, are preparing to increase certain fees levied on US merchants for processing transactions that will kick in this April.

The Wall Street Journal gave the information in a report on Friday, citing people familiar with the matter, reports Reuters.

Some of the changes relate to so-called interchange fees, the report said. Interchange fees are what merchants pay to banks when consumers use a credit or a debit card to make a purchase from their store.

Fees that Mastercard and Visa charge financial institutions, such as banks, for processing card payments on behalf of merchants are also set to increase, the report said.

Visa and Mastercard did not immediately to a request for comment.

Merchants often pass on any increases in processing fees to consumers, in an attempt to protect their own profits. Up to 2.5 per cent of prices for goods and services go to cover card fees, the WSJ said.

Card companies have said in the past that their credit and debit cards usually result in more sales for merchants, especially in countries like the US

They also say that expenses for ramping up anti-fraud/theft security measures, to make payment processing safer, need to be covered.

Recently, the two companies along with several US banks, had to pay over $6 billion to settle a lawsuit brought by merchants who 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.