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Visa has announced some updates for merchants. Transactions on e-commerce sites will have higher rates, while retailers in certain services categories, such as real estate and education, will see fees decline.
It got about the plan of financial corporation Visa to change the point-of-sale system for the U.S. merchants. According to the company, the move is the major system’s update through which Visa aims to persuade more people to give up using checks. Besides, the company is planning to adjust its fee structure for new businesses such as ride-hailing services.
“The U.S. credit interchange structure has been largely unchanged for the past 10 years. Based on the most recent review in the U.S., Visa is adjusting its default U.S. interchange rate structure to optimize acceptance and usage and reflect the current value of Visa products.”
Changes in Visa’s Point-of-Sale System
The updated system will function in the following way. Visa’s interchange rates set for card users depend on the merchant. Transactions on e-commerce sites have higher rates, while retailers in certain services categories, such as real estate and education, will see fees decline.
As Bloomberg has reported, traditional Visa cardholders will pay 9 cents more for a $100 transaction and premium Visa card owners will pay 10 cents more in comparison with current rates. Besides, interchange fees for premium-card holders will decrease by 33% for a $50 transaction for categories such as large supermarkets.
In addition, Visa wants to give more time to processors for implementing the changes. That is why new rates are rolling out in April and October.
Usually, Visa and Mastercard come up with similar updates at the same time. And their updates are always conditioned by changing demands and banking industry’s development. However, Mastercard, which has its own interchange policies, has declined to comment on whether it will propose something new.
Latest News from Visa
The plan of Visa to change the point-of-sale system follows the company’s numerous acquisitions and investments.
One of the latest acquisitions took place in January when Visa acquired Plaid, San Francisco-based company that focuses on democratizing financial services through technology. The sum of the acquisition made up $5.3 billion, which is twice as much as Plaid’s valuation in 2018.
Further, Visa led an $80-million funding round for cross-border payments platform Currencycloud.
Last week, Visa published its 2020 first-quarter financial results. The company’s revenues hit about $6.05 billion. The earnings per share were about $1.46. In addition, Visa had a market value of $433.7 billion.
2020 started pretty well for Visa, and the first-quarter results allow us to predict a productive year. Some believe Visa will cross the $25 billion mark in 2020. This represents a 7.8% increase in sales revenues from last year.