Three weeks after The Wall Street Journal reported that credit card giants Mastercard (MA 3.39%) and Visa (V 3.28%) were planning to levy higher "swipe fees" (aka interchange fees) upon merchant transactions using their branded credit cards, the same Wall Street Journal now reports...they aren't.
In late February 2021, WSJ relayed the credit card companies' plan to begin taking a higher percentage of "many online transactions" as well as on transactions made at "small supermarkets" and "restaurants" as early as April 2021. But according to the Journal -- and according to a press release I've just received from Visa itself -- this is no longer the plan.
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"Recognizing U.S. businesses are still facing many challenges posed by the COVID-19 pandemic, Visa has decided to significantly modify its planned April 2021 business release to delay the implementation of a number of interchange rate changes," said Visa. This move leaves in place "an interchange reduction for supermarkets and grocery stores [that was instituted] early last summer."
Visa says it is "postponing adjustments to rates" for e-commerce transactions as well "until April 2022." And it committed to "not make any future rate changes for another year while the economy recovers."
In its article published today, WSJ confirmed that Mastercard is likewise postponing its own planned April rate hikes. The paper noted that at least two Democratic senators had contacted the companies urging them to refrain from raising rates as the pandemic's effects linger. The move -- or refraining from moving -- is expected to cost the companies "hundreds of millions of dollars in" combined revenue that they would have collected had the rate increases been implemented as planned.
Mastercard stock is down a modest 0.7% in afternoon trading, 2:30 p.m. EDT, on the news, while Visa stock is up 0.3%.
