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The Wall Street Journal this morning reports that "Visa Inc. and Mastercard Inc. are preparing to increase the fees that many large merchants pay when they accept consumers’ credit cards.

"The fee increases - delayed during the past two years because of the pandemic - are scheduled to kick in next month … Interchange fees account for most of the increase. Merchants pay these fees, which are set by the card networks, when shoppers use their cards. The fees go to the bank that issued the card.

"Though invisible to shoppers, interchange fees are a constant source of aggravation for merchants. Their interchange costs have ballooned in recent years along with the popularity of rewards credit cards, which typically carry higher fees to cover the cost of travel perks and other benefits. But the networks’ 'honor all cards' rule means that a merchant who accepts one Visa credit card, for example, must accept all of them.

"U.S. merchants paid card issuers an estimated $55.4 billion in Visa and Mastercard credit-card interchange fees in 2021, more than double the amount in 2012, according to the Nilson Report. They pass along at least some of these costs to the consumer in the form of higher prices. More merchants have started charging consumers extra when they pay with credit cards."

KC's View:

These fees aren't just a constant source of aggravation - they're also a constant source of tension, litigation and proposed legislation as retailers seek to fight against what they see as usurious fees that create higher prices.

Expect more of the same moving forward, and retailers looking for ways to stop taking certain cards.  Lawyers and lobbyists connected to this issue are about to get very busy.

The fight this time may be even more intense, since the increases are coming at a time of growing inflation.