NEW YORK >> Visa says it will lower its credit card “swipe” fees for online and in-store transactions by 10% for small businesses starting in April.
The move comes as the pandemic continues to accelerate a shift to digital payments. Visa, one of the world’s largest payment companies, benefitted as more places began accepting cards and more people shopped online during the pandemic.
But the digital payments sector is becoming increasingly crowded. Visa is facing new forms of competition, particularly from tech firms that have debuted alternative forms of payment that go around the traditional Visa and Mastercard networks.
Visa currently charges 1.5% to 2.4% in consumer credit card interchange rates, a fee that a merchant is required to pay with every credit card and debit card transaction. The 10% cut takes place in April.
Visa said the cut affects 90% of businesses but didn’t specify what constitutes a small business. However, according to a Reuters report that cited a source familiar with the matter, the changes will apply to merchants with $250,000 or less in Visa consumer credit volumes.