Visa hikes UK-EU online interchange fees; faces US investigation into debit card practices
Visa is set to take advantage of Brexit to raise interchange fees on cross-border transactions between the UK and EU, according to the Financial Times. The move comes as the payments giant faces an investigation by the US Justice Department over possible anticompetitive practices in debit card transaction routing.
Prior to Brexit, UK merchants and card holders benefitted from a 0.3% cap on credit card interchange fees imposed by the European Commission.
But with the country withdrawing from Europe, from October Visa will increase the fees for online and over-the-phone purchases to 1.5%, says the FT, citing sources. The fee for debit card payments is also set to rise from 0.2% to 1.15%.
The rise mirrors a move already announced by Mastercard, which prompted widespread anger, with MP Kevin Hollinrake, who chairs the all-party parliamentary group on Fair Business Banking, saying it “smacks of opportunism”.
Visa is also increasing scheme fees on UK-EU transactions from July 2022, as well as charging more for domestic payments using British company credit cards from April 2022, says the FT.
The news comes shortly after Visa said it would delay interchange fee changes in the US to help businesses as they emerge from the Covid-19 pandemic.
Meanwhile the Wall Street Journal reports that the DoJ’s antitrust arm is collecting data as it looks into whether Visa has restricted the ability of merchants to send debit transactions through less expensive networks.
Th investigation is reported to be focused on online transactions but inquiries have also been made about instore payments.
In January Visa was forced to abandon its $5.3 billion acquisition of Plaid after the DoJ filed suit to block the combination over competition concerns around online debit transactions.
Visa shares closed on Friday down more than six percent.