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May 06th 2020

Visa Announces Delay to Interchange Fee Changes

Visa has announced that its upcoming U.S. credit card interchange fee changes will be delayed until April 2021 for every industry except grocery.


CMSPI had previously estimated that the increases to both Visa and Mastercard’s interchange fees would cost the U.S. merchant community $731 million a year – with the Wall Street Journal publishing these figures in its recent article.

In explaining their reasoning, Visa has said they “believe this is the right decision to ensure the long-term stability of the digital payments ecosystem”.

At a time where retailer across the majority of industries are seeing stores close and sales plummet, the delay of these increases from July 2020 to April 2021 will come as a hugely welcome relief to the merchant community. Pushing back the fee changes could mean merchants pay $465 million less in fees over the delay period, according to CMSPI estimates, with low-margin industries that have been hit the hardest by the pandemic – such as restaurants, airlines and hotels – set to benefit the most from the development.

However, the grocery industry’s interchange fee decrease will go ahead as planned in July 2020. Merchants in this industry are expected to see $255 million of interchange fee savings annually.

"This is undoubtedly a welcome relief for grocers because there were concerns that these interchange fee decreases would be delayed along with the other fee changes."

"However, this is far from a definitive solution: U.S. credit card interchange fees remain some of the highest in the world and we would like to see them decreased to much lower levels."

Callum Godwin - Chief Economist

What are the Upcoming Changes?

Visa has communicated two sets of interchange changes. The first of these – initially forecast for July 2020 – decreases interchange fees for grocers but increases them for merchants accepting high volumes of online commercial cards, including airlines and hotels.

Meanwhile, Visa’s second set of change – originally set for October 2020 – is set to fundamentally restructure many interchange fees, and will result in many restaurant paying significantly higher interchange fees.

Mastercard has announced interchange increases from July 2020, which will affect every major industry – with the exception of grocers, who will see little or no impact, and Travel & Entertainment merchants who will actually see decreases.

To gain in-depth insights into interchange fee changes and how merchants can prepare, watch our free, merchant-only webinar.

*All estimates are based on 2019 volumes, and therefore exclude the effect the pandemic has had on retail volumes