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PayVector responds to new Visa Debit Card Prices

May 05 2015

Did you know that Visa is changing the way businesses are charged for processing debit card payments?

Don't worry, PayVector's got your back!

We will ensure that our current merchants receive the same cost-effective rates that they have always had, and all new merchants can rest assured that our acquiring partners aim to continue offering new rates at the lowest prices on the market.

What are interchange fees?

Interchange fees are paid by your merchant account provider to your customer's (cardholder's) bank every time a Visa or MasterCard payment is processed.

The rates of interchange fees depend on the type of card (credit or debit), the associated risk (capture environment – ECOM or MOTO), and the country where the transaction takes place.

Credit card interchange fees are priced as a small percentage of the value of the payment.

Debit card interchange fees have, until up March 2015, been priced as a small flat fee.

Who enforces interchange fees? What are they used for?

The major card schemes, Visa and MasterCard, charge interchange fees to your merchant account provider to cover the costs of operating the card services.

According to Visa Europe, “Interchange is used to help the payment system function quickly and securely”. Interchange fees also contribute to investments in keeping electronic payments straightforward and secure for merchants and their customers.

What is changing and why?

The European Commission has decided to regulate consumer interchange fees across Europe. As part of this regulation Visa debit payments will be charged as a small percentage, similar to how credit card transactions have historically been priced.

In order to meet the European Commission’s new requirements, the Visa UK Board has changed all Visa interchange fees to a percentage-based model.

Merchant Account Rates: pre-March 2015 March 2015

Visa Debit

£0.xx x.xx%

How will this impact UK businesses?

Merchant account providers pass interchange fees onto their merchants. Visa suggests that this won’t affect merchants who process low value transactions, but it will mean higher value transactions will have higher interchange fees attached to them.

In order to relieve the pain on merchants, Visa has capped the amount of interchange that can be paid per debit transaction.

What does this mean for PayVector merchants?

Most of PayVector’s acquiring partners have also imposed the cap on Visa debit interchange, but a couple have chosen not to. PayVector will no longer set up our merchants with our acquiring partners that don’t impose the cap. The PayVector commitment has always been to deliver the most cost-effective acquiring rates to our merchants, and that is not going to change.

What will this means for PayVector White Label Resellers?

PayVector White Label Resellers will still have access to our current acquiring relationships, including those that don’t cap the Visa debit card interchange fee. How White Label Resellers price their merchants with their fully branded system is completely up to them.

If you have any questions or require clarification about interchange and card schemes, please contact our friendly Support Team on 020 8819 3460 or support@payvector.co.uk