Thursday , May 28, 2020

Visa Postponing Most Interchange Rate Changes Until April 2021

Citing the business disruptions caused by the Covid-19 pandemic, Visa Inc. announced late Tuesday that it will delay until next April most of the interchange rate changes it had planned for July. The network also publicly confirmed the six-month postponement of its EMV liability shift for fuel pumps, and further said it will be waiving Covid-related dispute fees.

A package of interchange rate changes, the first major adjustments in Visa’s interchange schedule in years, originally had been set to take effect last month. The package included increases for e-commerce transactions and decreases for supermarkets. In late March, Visa said it would delay implementation by three months because of the distress many merchants are experiencing from the pandemic. Mastercard Inc., American Express Co. and Discover Financial Services followed suit with postponements of their own planned April pricing changes.

“We will further delay previously announced U.S. interchange and fee changes for a year to April 2021,” Visa said in a blog post. “The exception is the planned interchange reductions in the supermarket segment will go forward. We believe this is the right decision to ensure the long-term stability of the digital payments ecosystem.”

The post also includes Visa’s first public announcement that its October EMV liability shift for automated fuel dispensers will be delayed by six months. Convenience stores, other gasoline retailers, and merchant groups have been urging Visa and the other general-purpose card networks to put off their planned liability shifts set to take effect in October, saying the downturn has only worsened the problems they already were having in upgrading pumps to accept EMV chip cards. EMV upgrades typically also include the ability to accept contactless payments.

“We are also further delaying the date for gas-station owners in the U.S. to upgrade their payment terminals to take EMV chip and contactless payments to April 2021,” Visa’s post says. “While we continue to believe EMV is the best way to decrease fraud, we recognize the supply chain and staffing challenges that are impacting the ability for gas-station owners to complete the upgrade at this time.”

American Express Co. disclosed earlier Tuesday that it was delaying its EMV fuel-pump lability shift until next April, but so far Mastercard and Discover haven’t said if they will postpone their planned shifts. Gas-station owners will be liable for counterfeit fraud losses if their pumps can’t read an EMV card’s chip after the shifts take effect.

Lastly, Visa’s post addresses the rising issue of disputed transactions caused by cancelled flights, events, and hotel stays. “As a result, we have seen an increase in ‘disputed charges’ between consumers, financial institutions and businesses, along with many merchants providing credits back to their customers’ Visa cards,” the post says. “To help support our clients, we are waiving Covid-related dispute fees. These fee limits build on our existing efforts to help the ecosystem manage the influx of disputes, including our Covid-19 Dispute Monitoring Program.”

The Merchant Advisory Group, an association of merchants concerned with payments issues, welcomed the Visa developments. “This is positive news for the merchant community as it gives them needed relief from incremental expenses of accepting payments,” MAG chief executive John Drechny said in a statement. “We appreciate Visa hearing the concerns from the merchants and moving in a direction which provides relief. We will continue to work with Visa and the other networks to help them understand the continued pressure businesses face and develop solutions which will help alleviate this pressure.”

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