Visa plans to raise fees after Brexit withdrawal of EU cap

Visas force price increases after a series of Brexit, which could put additional pressure on consumers and small businesses struggling to address the economic impact of the coronavirus pandemic.

In October, Visa will charge for all debit or credit card payments that use the network on behalf of banks in cross-border transactions between the UK and the EU, according to people briefed on the plan. Increase the “exchange fee”.

Payment processors also plan to raise so-called scheme fees for UK-EU transactions, as well as charge more for domestic payments using UK companies’ credit cards. People added.

“As the transition to cashless and e-commerce accelerates, it’s important that the sentiment of SMEs and consumers isn’t suppressed by rising card costs, just as they’re trying to recover from a serious recession,” said Foreign Affairs. Craig Beaumont, director, said. In the Federation of Small and Medium Enterprises.

Brussels capped the exchange fees for all transactions in the EU in 2015, but in the UK Departure January 1st means that there are no restrictions on payments between the UK and Block.

Starting in October, Visa will increase 1.5% of credit card payments made online or by phone between the UK and EU and 1.15% of debit card transactions from 0.3% and 0.2%, respectively. ..

Post-Brexit fee increases could hurt more companies than similar moves announced by rivals master Card In January, as companies continue to rise, there is growing concern that UK consumers will be more expensive to buy online.

Mastercard has been widely criticized for applying high fees to transactions purchased from EU-based sellers using UK cards. Visa changes also apply to UK companies selling to the EU, according to those who were briefed on the plan.

Sky News first reported that Visa will raise interchange fees for UK purchases from most of Europe.

The move will occur a few days after Visa has postponed some planned changes to interchange fees in the US domestic market and promised to help businesses recover from the pandemic.

Peter Keenan, CEO of Apexx Global, provides payment services to e-commerce companies such as: AssosSaid that inquiries from companies trying to set up new EU or UK entities to avoid higher fees have already increased, but added that the options are too complex for SMEs.

“The little guys don’t have the resources to set up a French or German entity,” Keenan said.

Both Visa and Mastercard emphasize that card issuers do not directly benefit from the higher exchange fees they use to finance new products and fight fraud.

However, in filing with the regulator, the visa admits that: [interchange] Fee. .. .. .. .. .. Higher fees can cause bank customers to use the network, which can have a significant impact on overall payments and revenue.

Another plan to raise scheme fees that Visa charges companies using the network to process payments will apply to transactions between the UK and the EU and will come into effect in July 2022. Visa does not disclose the exact level of scheme fees it holds. However, they said they remained the “minimum portion” of the total amount of fees companies pay for card transactions.

Meanwhile, so-called commercial interchange fee increases, including corporate credit cards, came into effect in April 2022, increasing costs for companies in sectors such as travel, which are particularly dependent on corporate spending and have been hit hard by the pandemic. I will. ..

Commercial interchange fees are not restricted by regulation, and people near Visa said the proposed price increase had nothing to do with Brexit.

He added that Visa’s commercial interchange fee was historically lower than that of Mastercard, and that the change would make it more or less consistent with its rivals.

Visa said: “As a network, we continue to focus on balancing the needs of all participants in the ecosystem that will benefit from the ability to use and accept digital payments. Visas continue to be the most cost-effective and secure. It is one of the payment methods. “

A person near Visa added that less than 5% of consumer transactions in UK businesses would be affected by cross-border fee changes.

Visa plans to raise fees after Brexit withdrawal of EU cap

Source link Visa plans to raise fees after Brexit withdrawal of EU cap

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