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Are you about to pay more to process Visa Debit cards?

By 27th January 2015No Comments

<br /> Laurence Fitch

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Laurence Fitch

Many organisations are completely unaware of a major change to the way Visa Debit cards will be charged from 1st March 2015, even though for many this will result in an increase for the cost of their card transactions.

What are the changes?

Visa are changing the Interchange element of the pricing that they apply to each transaction, which is then processed via the Acquirers, eg Cardnet, WorldPay, Barclaycard etc. Currently Interchange is charged at a flat pence per transaction (ranging from £0.01p for contactless transactions to £0.18p for non-secure transactions) and is included within the overall FLAT rate price paid by a Merchant for their debit cards to the acquirer / processor, eg 12p, 15p,  20p, 30p per transaction and so on.   This will be changing to a % of transaction value WEF 1st March – Visa have announced that the Interchange element of a transaction will be 0.2% + 1p for secure transactions and 11p for a non-secure transaction.

Who will this effect?

This change will have an effect on the overall cost of processing card payments, particularly where average transaction values are high.

We have seen a very recent example of the change where pricing is set to increase from a flat 11p per transaction currently, to 0.495% of the transaction value (ie 49.5p per £100 of card turnover). In this example all orders valued over £22.25 would incur higher fees and the fees payable on a £100 order would be x4.5 the current rates charged.

What can you do?

Now would be a very good time to review your merchant card providers rates to see how you will be affected. However, even with the right tools and supplier relationships this can be a complex and a difficult area to review and you may want to look for expert independent help for this area.

Our company, Auditel, have been conducting reviews for a number of years. We know from experience that successful reviews can be very beneficial and in the last 12 months at Auditel we have reduced the costs for a leading London theatre by over 35% and a large charity is set to benefit from savings forecasted at 22%.

If you are serious about reducing costs in this area why not contact Laurence or Ruth (01234 708466) to see if Auditel can help you.