The Merchants Payment Coalition (MPC) is publicizing documents indicating that Mastercard is increasing its assessment fee as of April 15. The news may seem suspicious to some after the recent Mastercard/Visa settlement on swipe fees, but there is less here than meets the eye.
In a nutshell, Mastercard plans to increase its Acquirer Brand Volume Fee, also known as an assessment fee, from 0.13% to 0.14%. The fee applies to all credit, debit, and prepaid card transactions. The MPC is stating that this “proves the credit card companies are continuing to take advantage of Main Street.”
This announcement comes on the heels of a recent settlement from Mastercard and Visa in which both companies agreed to reduce their swipe fees and not raise them for five years. While merchants are responsible for paying swipe fees, assessment fees are imposed on member banks, not the merchants themselves.
“Later this month, a few pricing changes—completely unrelated to interchange—will go into effect for issuing and acquiring banks, having been shared with them last year,” a Mastercard spokesperson said in a statement. “All of the changes we announced to customers relate to delivering value and strengthening security for banks, business owners, and consumers.”
Normal Fee Adjustments
Historically, both Mastercard and Visa have adjusted their fees biannually. The MPC noted that Visa and Mastercard have repeatedly imposed such fee increases over the past decade.
Mastercard has said these fees are unrelated to the reduction in interchange or swipe fees and that it had already announced that it would be issuing pricing changes later this month. According to Mastercard, some of the increased fees are related to core systems, while others are related to optional services like merchant risk monitoring and holistic merchant data insights to help reduce fraud.
Industry analysts have noted that the rise in assessment fees was both expected and minor.
“Mastercard is indeed raising some fees and announced the increases long before the recent settlement,” said Brian Riley, Director of Credit & Co-Head of Payments at Javelin Strategy & Research. “Some headlines have misrepresented Mastercard’s actions, but the change involves assessments to member banks, not merchants. And the increase is a single basis point. We’ve even seen some merchant contingents implying that this action is another reason to support the Card Competition Act, which is simply inappropriate.”