Interchange announcements

Pizza Shop Talk The Think Tank
1

Here are the recent and upcoming changes to Visa/MasterCard Interchange and Debit Network structure

Visa Announcement

Visa has announced an increase on the Visa Assessment fee. The Assessment fee will be changing from .0925% to .11% effective July 1, 2010.

PIN Debit Announcements

Effective April 1, 2010, NYCE is implementing a “Premier Issuer” fee and STAR is implementing an “All STAR” fee.

Effective June 1, 2010, PULSE is implementing a “PULSE Pay Choice” fee.

This Premium mark-up by each Network is an additional incentive paid to Issuing Banks that commit a specific amount of card issuing volume to a network. The Premium Fee will only be passed on transactions where the card belongs to a qualifying Issuer. The volume is estimated to be between 15% and 50% for each of the three networks. This is an additional per item fee assessed on top of the regular debit network fees. The rates are as follows:

* The NYCE Premier Issuer Fee is an additional $0.011 per item, effective April 1, 2010
* The ALL-STAR Fee is an additional $0.025 per item, effective April 1, 2010
* The PULSE Pay Choice Fee is additional $0.05 per item, effective June 1, 2010

October 2010

Visa has announced additions to the CPS/Small Ticket Interchange Program. Effective October 2010 CPS/Small Ticket has been extended to most merchant category codes (MCCs). Most merchants will be eligible to qualify for the U.S. CPS/Small Ticket Interchange program. Current CPS/Small Ticket Interchange applies to transactions less than $15. The Visa Small Ticket Credit Interchange is 1.65% + $0.04 and the Visa Small Ticket Debit Interchange is 1.55% + $0.04.

MCCs excluded from U.S. CPS/Small Ticket Interchange Reimbursement Fee include Grocery Stores, Convenience Stores, Service Stations, Wire Transfer Money Orders, Automated Fuel Dispensers, Direct Marketing - Insurance Service, Direct Marketing - Travel-Related Arrangement Services, Direct Marketing - Catalog Merchants, Direct Marketing - Combination Catalog and Retail Merchants, Direct Marketing - Outbound Telemarketing Merchants, Direct Marketing - Inbound Telemarketing Merchants, Direct Marketing - Continuity/Subscription Merchants, Direct Marketing/Direct marketers (not else classified), Financial Institutions - Manual Cash Disbursements, Financial Institutions - Automated Cash Disbursements, Intra-Government Purchases.

Transactions made through merchants eligible for the Visa CPS/Retail and Supermarket performance threshold Interchange programs will not be eligible for the CPS/Small Ticket Interchange program.

July 2010

Visa has announced an increase on the Visa Assessment fee. The Assessment fee will be changing from .0925% to .11% effective July 1, 2010.

Visa has announced changes to their No Signature Required (NSR) program. Effective July 2010, the NSR program has been extended to most merchant category codes (MCCs). Transactions on U.S. issued cards of $25 or less from most all MCCs will be eligible to qualify for the NSR program.

MCCs excluded from Visa’s NSR program include: Wire Transfer Money Orders, Automated Fuel Dispensers, Direct Marketing - Insurance Service, Direct Marketing - Travel-Related Arrangement Services, Direct Marketing - Catalog Merchants, Direct Marketing - Combination Catalog and Retail Merchants, Direct Marketing - Outbound Telemarketing Merchants, Direct Marketing - Inbound Telemarketing Merchants, Direct Marketing - Continuity/Subscription Merchants, Direct Marketing/Direct marketers (not else classified), Financial Institutions - Manual Cash Disbursements, Financial Institutions - Automated Cash Disbursements, Intra-Government Purchases.

May 2010

The debit networks Accel and Pulse have announced several changes to their debit network pricing effective May 1, 2010. The changed fees are as follows:

Accel

* Retail merchants will be billed at 0.80% + $0.21 per transaction with no maximum fee per transaction.
* Quick Service Restaurant (QSR) merchants will be billed at 0.95% + $0.18 per transaction and the maximum fee for QSR transactions has been eliminated.
* Supermarket merchants will be billed a total of $0.31 per transaction.
* Petroleum merchants will be billed at 0.80% + $0.19 per transaction with no maximum transaction fee. These transactions were previously bundled with Retail and will now post separately.
* PINless Utility merchants will now post separately from regular PINless and will be billed a total of $0.660 per transaction.
* All other PINless transactions will be billed at 0.75% + $0.21 per transaction with a maximum transaction fee of $1.28.

Pulse

* Retail merchants will be billed at 0.86% + $0.21 per transaction with no maximum fee per transaction.
* Supermarket merchants will be billed a total of $0.345 per transaction.
* Petroleum merchants will be billed at 0.71% + $0.21 per transaction with a maximum transaction fee of $1.03.These transactions were previously bundled with Retail and will now post separately.
* PINless Utility merchants will be billed a total of $0.755 per transaction.
* All other PINless transactions will be billed at 0.80% + $0.27 per transaction.

April 2010

MasterCard

Currently, MasterCard’s Assessment fee is 0.095%. MasterCard will increase the Assessment fee to 0.110%.

MasterCard is introducing new Interregional Interchange programs. A unique brand product classification has been defined for each of the consumer credit, debit, and commercial product families. The following brand products will qualify for the new Interregional Consumer Premium Interchange Structure.

* MasterCard World Card
* MasterCard World Elite
* World MasterCard for Business
* MasterCard Corporate World
* World Elite MasterCard Business
* MasterCard Corporate World Elite

Business Data Rate programs fees have been modified for both World and World Elite categories.

MasterCard is revising the qualification criteria for Commercial Face to Face and Commercial Data Rate II. Effective April 2010, zero will no longer be accepted as a valid tax value to qualify for these rate categories. Only non-zero tax values that fall within the specified valid range will be accepted. Therefore, if a commercial transaction has no sales tax, the transaction will downgrade to a lower Interchange level.

MasterCard is adding a new Interchange program for MasterCard Enhanced Small Business. The following card programs will be supported in the U.S. Small Business Sector:

* MasterCard BusinessCard Card
* MasterCard Professional Card
* MasterCard Executive BusinessCard Card

MasterCard Pay with Rewards Service
This service provides cardholders with the ability to redeem their loyalty points as currency to pay for purchases at any merchant where MasterCard-branded payment cards are accepted. The cardholder will use a separately issued “redemption card,” which will be a MasterCard debit product, to initiate points redemption transactions at the POS. Participating card issuers will register redemption cards into the MasterCard Pay with Rewards service. At the time of redemption, a Pay with Rewards cardholder will present his or her redemption card as any other payment card today.

New Interchange Fees for Pay with Rewards (Consumer Core, Consumer Debit, Consumer World and Commercial) will start out at 0.90% + $0.00

Visa

Visa is implementing modifications to the No Signature Required program:

* MCC 5993 (Cigar Stores/Stands) is being added as an eligible MCC
* Standardize amount to equal to or less than US $25.00 to be eligible.
* Transaction with cash back amounts will not be eligible.

Visa will adjust the following U.S. Visa Debit Interchange reimbursement fees.

Fee Program

Current Fee

April 2010 Fee

CPS Retail Debit

1.03% + $0.15

0.95% + $0.20

CPS Supermarket Debit

1.03% + $0.15 ($0.35 max)

0.95% + $0.20 ($0.35 max)

CPS Service Station Debit

0.70% + $0.17 ($0.95 max)

0.75% + $0.17 ($0.95 max)

CPS Automated Fuel Dispenser Debit

0.70% + $0.17 ($0.95 max)

0.75% + $0.17 ($0.95 max)

Interlink PIN Debit

Visa has announced changes in the pricing for Interlink debit transactions.

Fee Program

Current Fee

April 2010 Fee

Interlink Standard— IV

0.75% + $0.17

0.95% + $0.20

Interlink Supermarket—
Performance Threshold IV

$0.25

0.95% + $0.20 ($0.35 max)

Interlink Standard—Fuel

0.70% + $0.17 ($0.95 max)

0.75% + $0.17 ($0.95 max)

Interlink Quasi Cash

1.80% + $0.10

2.30% + $0.10

NYCE PIN Debit

* NYCE will implement a Premier Issuer fee of $0.011 per transaction. This will be an addition to the existing interchange fees.

March 2010

STAR PIN Debit has announced modifications to the current rates effective March 1, 2010. The changes are as follows:

* Retail merchants will be billed at 0.80% + $0.2125 per transaction. The maximum transaction fee is being eliminated.
* Quick Service Restaurant merchants will be billed at 01.25% + $0.1925 per transaction. The maximum transaction fee is being eliminated.
* Petroleum merchants will continue to be billed at 0.80% + $0.1725 per transaction however the maximum transaction fee is being eliminated.
* Supermarket merchants will be billed at $0.3025 per transaction
* Medical Retailer merchants will be billed at 1.20% + $0.2425 for each transaction equal to or less than $15.00. Transactions over $15.00 will be assessed the standard Retail rates.
* Small Ticket Retailer merchants will be billed at 1.25% + $0.1925 for each transaction equal to or less than $10.00. Transactions over $10.00 will be assessed the standard Retail rates.
* PINless transactions will continue to be billed at 0.65% + $0.1725 per transaction. The maximum transaction fee is being increased to $2.0425.

February 2010

NYCE PIN Debit

* The switch fee will be decreased from $0.05 to $0.0425.
* Retail merchants will be billed at 0.75% + $0.2125 per transaction. The minimum transaction fee will be decreased to $0.3025.
* Quick Service Restaurant merchants will be billed at 0.55% + $0.1075 per transaction with a maximum fee of $0.5425. The minimum transaction fee will be decreased to $0.2275.
* Supermarket merchants will be decreased to $0.3025.
* Petroleum merchants will be billed at 0.85% + $0.1925 per transaction. The minimum transaction fee will be decreased to $0.3025.
* Returns will be decreased to $0.0425 per transaction.
* PINless Utility merchants will be billed at $0.6550 per transaction.
* PINless Cable merchants will continue to be assessed 1.00% + $0.125 per transaction. The maximum transaction fee will be increased to $1.055.

CU24 PIN Debit

* The switch fee will be increased from $0.025 to $0.028.
* Retail merchants will be billed at 0.75% + $0.178 per transaction with a maximum fee of $0.828
* Quick Service Restaurant merchants will be billed at 1.25% + $0.058 per transaction with a maximum fee of $0.478.
* Supermarket merchants will now be billed $0.258 per transaction.
* Drug Store and Pharmacy merchants will be billed at 0.75% + $0.178 per transaction with a maximum fee of $0.828
* Petroleum merchants will be billed at 0.75% + $0.168 per transaction with a maximum fee of $0.728
* Returns will now be billed $0.028 per transaction
2

And why the heck are card issuers increasing their marketing of cash back cards?..They look like heroes on the backs of hard working pizza place operators…Very unfair and they need to be stopped…

3

Exactly. The banks market it as if they give away the money, when in reality it’s the merchant. Do people ever stop to think who exactly pays for their cash back and bonus miles?

Something needs to be done about the credit/debit card system. Visa/MC and Amex have an essential monopoly, and we have to pay whatever they say. Not to mention we have to abide by their rules, when it’s my business. The best course of action is to remove the restrictions on a surcharge for credit card transactions. Of course that would hurt their businesses, and they have much better lobbyists than I do.

We need a large retailer to put their foot down and start the snowball.

4 
    Want to pay the IRS with your credit card?  You have to pay a 3% surcharge("convenience fee").  If we try charging a "convenience fee" not only are we violating the "rules" visa and MC have set for us, but here in Florida we are actually breaking the law!  What a load of bull#@*t.
5

Why don’t we all begin offering a discount for paying cash? We can’t tack on a surcharge, but as far as I can tell nothing is preventing us from offering a lower price to encourage a more favorable form of payment.

Customer: “Why do you offer a 3% discount for cash?”
Merchant: “Because I’m not allowed to pass along my true cost of processing credit directly to the customer using a card.”
Customer: “Wait… what. You get charged when I use my card?”
Merchant: Slow, sad nod
Customer: “Well, using a credit card is much faster than cash! Haven’t you seen the commercials? Oh, and by using this card I’m actually earning towards the purchase of my next new car. You see, saving money no longer requires frugality or sacrifice! You know, I’m actually kind of angry that you’re trying to rip off us hard-working people just because we want the convenience that a credit card brings…”
Merchant: Begins to cry

Er, on second thought - nevermind.

6

Very simple. stop taking credit cards and get an ATM machine.
Charge a small nominal fee to take money out and make money from the damn thing instead of visa/mastercard.

7

Robt

The ATM idea is not going to be worth it anymore, they are currently trying to pass a law that would allow you to charge no more than .50 per transaction(I have one processor just sent me a letter). Last year I paid somewhere around 55,000 in fees,I am almost at the point where I’m going to take my chances and charge a convenience fee. I figured it to be about .50 per transaction that I would pass along just to break even.
Why is it that the government can charge a fee and I cant. When I was at the expo this year the cabs in Vegas where charging a 3.00 fee to you credit cards, doubt anyone will say they cant.Its all Bull!

8

Funny thing but in Australia we are allowed to surcharge up to 3% as a recovery of costs. We dont and most dont but a number of independent petrol stations surcharge 2.5%, QANTAS our national airline charges $7.70 if you pay by card for online bookings (how else can you pay online???) an a lot of utilities charge a fee for cards.
I know if we surcharged for cards I would be hung and quatered outside my shop by an angry mob.

Dave

9

Newest Infomation 6/21/2010

http://durbin.senate.gov/showRelease.cf … eId=325810

Hopefully help is on the way for merchants and interchange/fee issue, be sure to read all the categories :smiley: