Two major credit card companies plan to increase merchant fees, according to The Wall Street Journal.
The companies have delayed fee increases the last two years amid criticism from lawmakers about their timing during the pandemic, according to the Journal, but that will change in April and affect large merchants most prominently. Five things to know:
1. Interchange fees paid by merchants comprise most of the fee increases, and some companies have started charging customers more when they pay with credit cards. Last year Visa and Mastercard made about $55.4 billion in credit card interchange fees.
2. Visa said it will lower fees for some merchants who have $250,000 or less annual consumer credit card volume. To avoid paying fees, companies can provide transaction data and use Visa's token service masking card numbers, Visa said.
3. Mastercard said it will lower costs for merchants with transactions below $5 and for sectors "hit hard by the pandemic," according to the report.
4. Fifty-six percent of credit card holders reported paying medical costs with a credit card in 2019, according to a LendingTree survey, and millennials were more than twice as likely to do so as baby boomers.