Visa to cut consumer credit fees for US small businesses by 10%

[BENGALURU] Visa Inc will lower consumer credit interchange rates for small businesses in the United States by 10 per cent, effective next month, to help merchants recovering from the Covid-19 pandemic, according to a document seen by Reuters on Thursday.

Visa, the world's largest payment processor, is reducing interchange rates for both online and in-person consumer credit transactions for 90 per cent of US businesses, the document showed.

An interchange fee is the charge a merchant pays to the card-issuing bank every time a consumer swipes their card.

The changes will apply to merchants with US$250,000 or less in Visa consumer credit volumes, according to a source familiar with the matter who declined to be identified because the document is confidential.

Visa and Mastercard have seen more consumers turn to online modes of payments, as people use cards to pay for clothes, food, groceries and even leisure spending since the start of the pandemic.

The two payment processors last year had postponed plans to raise the fees US merchants pay when customers use cards online until April 2022.

A spokesperson for Visa confirmed the authenticity of the document. REUTERS