Visa is putting its new interchange schedule into action on Oct. 1, the same day that the Durbin Amendment becomes effective.
The plan includes cutting a few rates for non-regulated debit issuers and a strong push for more prepaid cards, DigitalTransactions.net reports. Visa will also eliminate volume-based tiers for supermarkets and retailers on its signature debit cards and Interlink PIN-based debit cards.
Both Visa and MasterCard update their interchange schedules several times a year, but this year requires much more planning because the Federal Reserve recently knocked down the amount for interchange fees to 21 cents.
The new rule does not include general-purpose reloadable prepaid however, hence Visa’s push toward prepaid cards and away from conventional debit, which is no longer as profitable for credit card issuers.
Visa’s new schedule adjusts rates in 19 interchange categories for its company-branded prepaid cards, with most of them increasing, DigitalTransactions.net reports. The basic retail rate will go from 0.95 percent plus 20 cents to 1.15 percent plus 15 cents.
Visa’s prepaid card supermarket rate is also set to rise from 0.95 percent plus 20 cents to 1.15 percent plus 15 cents, DigitalTransactions.net reports.
Automated fuel dispenser transactions represent the largest increase in the Visa-branded prepaid categories. This rate will move from 0.75 percent plus 17 cents, with a 95-cent cap, to 1.15 percent plus 15 cents, with the cap remaining.
“[Visa] clearly is upping prepaid across the board and giving lip service to some categories,” Steve Mott, the chief executive of the Stamford, Conn.-based BetterBuyDesign said, according to DigitalTransactions.net.
In addition, Visa is planning on reducing its pricing for Interlink supermarket rates but raising the interchange rate for small transactions.