Are Businesses in Store for More Interchange Increases?
I have discussed in previous posts new Interchange category rate changes that most business owners have most likely seen notifications about on their statements. Most of these notices say “Increase” and these increases are being passed on the merchant. Not all Interchange categories have experienced increases – the main changes have been in the Business, Corporate, and Purchase Card categories and the increases range from .05% to as high as .25%.
Some of the main increases have been Corporate Card Non -Travel Level 2 with an increase of .05%, Purchasing Card Retail with an increase of .10%, and Business Standard T&E with an increase of .25%. Card types such as Corporate Card Retail had a decrease of .10%. Although the CPS Automated Fuel Dispenser Credit category went down significantly on their rate by .35%, they raised their transaction fee by .20 cents.
Many merchants that take the card types in the increased categories may want to contact their merchant services provider to see what their total increase will cost them.
MasterCard has changed rates in the Consumer Core Value, Enhanced Value, World Card and World Elite cards. These card types primarily affect the insurance and utility SIC codes. If you are in one of these industries, your merchant processing charges may significantly increase. Previously, MasterCard had a Program Registration ID requirement for utility companies to be eligible for special, and sometimes lower, Interchange rates. This is no longer a requirement.
Some merchant processing providers will absorb the cost of any increases, but many do not. Since most of the increases are with card types that are generally considered to be Non-qualified, many processors are passing on an increase to all Non-qualified card types whether they received an increase or not. I’ll keep you posted with more increases, decreases and updates.
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