Visa to charge new location fee

Visa introduces a new pricing model, but provides only limited details. As reported in the International Business Times, Visa will be implementing a new fee called a “Network Participation Fee” that will apparently be a fixed site fee billed according to number of merchant locations accepting any U.S. Visa debit, credit, or prepaid card.

While Interchange fees are scheduled to move lower in October, this new Visa fee (like other Visa fees charged to acquirers) will be pass through to merchants in one form or another. Given this fact, the idea is that the more Visa transactions a merchant accepts, the lower this new fixed location fee becomes on a per transaction basis.

Now that the final Fed rules give merchants control over the routing of transactions, Visa hopes that this new fee structure will incent merchants to choose its network over others in an effort to have enough transaction volume to make the fix location Network Participation Fee irrelevant.

How much will the fee be, when will it start and how will MasterCard respond? We will post details as they come available.

 

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