Visa Inc. announced it will lower its credit card “swipe fees” by 10% for online and in-store transactions in small businesses, effective in April.
Visa charges 1.5% to 2.4% in consumer credit card interchange rates, a fee that a merchant is required to pay on every credit card and debit card transaction.
The rate cut occurs as the digital payments sector becomes increasingly competitive.
Visa, one of the world’s largest payment processors, said the rate reduction will affect 90% of businesses but didn’t specify how it defines a small business. However, Reuters, citing a source who is familiar with the matter but declined to be identified, reported the changes will apply to merchants with $250,000 or less in Visa consumer credit volumes. A Visa spokesperson subsequently confirmed the report.
COVID-19 has accelerated a shift to digital payments. More businesses are accepting cards, and consumers have begun using cards to pay for clothes, food, groceries and even leisure spending since the start of the pandemic.