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The Impact of the Interchange Fee Dispute
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Tanim Minha
- 29/11/2022
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Tensions between retailers and card networks (more specifically, Visa and Mastercard) have been at an all-time high as of recent memory. This tension is arguably a result of a lack of transparency between companies, generating a lot of misconceptions about the Merchant Service industry. We therefore decided it would be a good idea to clear things up for you to explain what is happening and how it might affect you.
An interchange fee is a percentage that’s sent to the card issuers for the processing of a card transaction. This is very dependent on the type of transaction: think of the difference between a corporate card or commercial card for example. The important aspect of these fees is that they’re non-negotiable, meaning payment processors will often work around these. While demystifying these fees are important for merchants, they’re inescapable as a fee.
Click here to learn more about Interchange Fees.
This has caused friction between large retailers with Visa and Mastercard. Last year, there was an incoming surge of pressure on the card networks through lawsuits – due to the increasingly high fees. It all then boiled over this year, with a highly publicised dispute between Amazon and Visa, with Amazon even threatening to ban all UK Visa credit cards from their platform because they deemed the fees to be to high. The impact this has on the Merchant Service industry cannot be understated, generating a lot of scepticism for the services that can be offered.
Bespoke Merchant Solutions is dedicated to protecting the SME’s of the country from unnecessary expenditure from hurting your business. While we cannot negotiate the interchange fee, we have competitive rates to ensure you’re able to save money where possible. We have a free comparison service to analyse your current Merchant Service bills, including fees that are on top of the interchange.
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