Periodically Visa and Mastercard (independently, of course, since collaborating would probably violate antitrust laws) recently announced changes to their interchange rates and assessments. Those who read this blog regularly know that interchange rates are the revenue that goes to the credit card issuers (like Capital One and MBNA) and that assessments are the revenue that goes to Visa and Mastercard.

I recommend checking out a pretty detailed article on P.8 of the April issue of Digital Transactions Magazine.  In this latest round of interchange rate changes, both Visa and Mastercard increased rates by about 4% on several categories of rewards cards and decreased rates by about 2% on several categories of non-rewards cards.  Since the majority of transaction volume is rewards cards (and growing), this will likely result in a net increase for most customers.

Visa and Mastercard are also both adding an additional $0.02 per transaction fee that is not passed along to card issuers – visa’s is called the Acquirer Processing Fee and Mastercard’s is called Network and Brand Usage Fee, which should generate around $600M in additional revenue each year for Visa and Mastercard.

Unfortunately this will result in credit card processingcosts increasing for nearly everyone.  Business owners, please check your bills carefully next month to see how these new credit card processing fees are being applied.  Hopefully your processor is passing them along directly, and not using it as an opportunity to increase their own profits by adding a markup.