General

U.S. merchants will spend over $90 billion in credit card processing or swipe fees in 2019. For many organizations, these fees represent one of their top five operating costs.

There’s money —a lot of money — to be made helping people spend theirs, from signing on a check and swiping a card to tapping your phone on a point-of-sale terminal. The billion-dollar companies that make technology to make payments go are the targets of game-changing mega-mergers, as innovation in the industry advances at a rapid clip.

Over the years, we have seen many increases in interchange fees. Every 6-12 months, Visa/MC will pinpoint specific interchange rates that they choose to go up or down (mostly up). These increases usually apply to only a few categories each release, and they are fairly straightforward to forecast the cost impacts. For example, in October 2017, Visa increased Commercial Card Not Present Purchasing and Corporate cards from 2.65% to 2.70%. For most merchants, this was not a major increase (only 5 basis-points) as it only applied to these specific card types and only on CNP sales missing Level 2 data.