Visa will increase debit card fees for small-ticket purchases to the maximum amount allowed under new rules.
The world’s largest consumer-payment network said it may raise fees from eight cents to 23 cents for a $2 purchase, Bloomberg.com reports. It will cut the interchange portion of the fee and charge the highest amount allowed under the Durbin Amendment.
The move will “kill the economics for small-ticket debit purchases and influence a shift back to credit cards,” Thomas McCrohan, an analyst at Janney Montgomery Scott LLC, said, according to Bloomberg.com. “It will almost certainly lead to a merchant revolt against the card networks.”
McCrohan said the increase could be an attempt by Visa to rein in revenue that it will lose once the Durbin Amendment takes effects and costs it billions of dollars in interchange fees each year.
Visa did not specifically commented on the change, WSJ.com reports.
During a meeting in New York on Tuesday, Bill Sheedy, the group president of the Americas for Visa, said the company hadinformed clients of some rate changes it is making but did not discuss specifics.
"We need to make sure that we strike that right balance between driving value to the consumer and the merchant on small ticket purchases,” Sheedy said, according to WSJ.com.