Visa EIRF is Gone Forever (…sort of), Visa Business B2B Eliminated

As many of you are beginning to review your merchant statements from July 2020, you might be noticing some new categories from Visa cards. While Visa announced that it would be pushing their previously released updates for April/July 2020 to April 2021 due to COVID, we are seeing that they moved forward with some of these changes.

Many news outlets and industry articles cited this announcement and mentioned that the only changes going in with July 2020 were the reduced grocery rates. However, there are several more changes that were implemented, which may be increasing your costs:

  • Visa Business to Business (B2B) on Business cards has been eliminated. These transactions should fall to the new Visa Business Product 1 (CNP) or Visa Business Product 2 (CP) rates. This could add 15-20 bps to many B2B merchants’ costs on Visa Business cards.
  • Visa EIRF Credit has been eliminated. Transactions previously qualifying for Visa EIRF Credit, as a downgrade from optimal rates, will see their costs increase to the higher Non-Qualified Credit rates. This increases the penalty for downgrades from a rate of 2.30% + $0.10 for EIRF to now 2.70% + $0.10. This only affects credit cards, but could be significant for merchants struggling with downgrades. However, this is not the same increase that was previously announced, which took Non-Qualified Credit to 3.15% + $0.10, that change is still planned for April 2021.
  • However, Visa EIRF still exists for unregulated debit and prepaid cards
  • Finally, there is some relief… For merchants that are downgrading on high-end premium cards, your Visa Signature Preferred Standard qualifications will be reduced from 2.95% + $0.10 to 2.70% + $0.10 with the new Non-Qualified Credit rate.

In addition to the major highlights above, there were a few less significant changes. Overall, these changes are increasing interchange costs for these categories by 0.15%-0.40%, depending on data submitted at the transaction level. For a complete list of changes or help understanding the complexities around these updates and payments costs in general, please reach out to us.

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