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Spring 2021 Interchange Changes


As you are aware from our recent email and social media posts, 2021 has been a volatile year for the credit card brand's normal interchange update schedule. Most significantly, mid-March, Visa, Mastercard, and Discover announced that they were postponing their planned changes for a year.

Let us dig into what is actually changing this spring, and what has been postponed to next April.

Visa has overhauled a portion of their interchange category structure. They have created new market segment interchange categories for specific types of merchants (e.g. Taxi, Real Estate, Education, Healthcare) each with their own rates, and they have eliminated several existing categories. Examples of eliminated categories include CPS Hotel CNP, CPS Rewards 1, and CPS Rewards 2. 

Visa has also created a generic group of interchange categories for Card Present (CP) and Card Not Present (CNP) transactions. Product 1 is the generic group of categories for CNP and Product 2 is for Card Present (swiped or chip) transactions. Many consumer card transactions that do not fit into the new market segment categories will fall into one of these categories. 

The implementation of the structure update will still occur this year, but Visa has announced they are delaying the rate modifications for Product 2 (CP) until April 2022. The Product 1 (CNP) rate modifications will still be implemented as planned in April 2021. 

In April 2020, Visa created an interchange category called Non-Qualified Consumer Credit that is assigned to transactions that are not “CPS-qualified”, which means they do not adhere to Visa’s requirements for how they are processed. Visa had slated a rate increase for this interchange category, but they are delaying this rate increase until April 2022.

Visa has announced new rules regarding declined transactions. If a merchant reattempts a declined transaction on the same card more than 15 times in 30 days, the merchant will be assessed associated fees. 

Mastercard is delaying all US interchange increases originally scheduled for this year until April 2022. Next spring, you can expect to see increases in many CNP categories, as well as reductions of an average of 8% in the negative interchange returned to merchants who are set to Net Billing when they process consumer credit card refunds. 

Discover had planned to increase their Acquirer Assessment Fee (assessed on all settled Discover transactions) from 0.13% to 0.14% this year. However, they have announced the deferral of this increase until April 2022. 

Discover will move ahead with several fee increases in April 2021 including their Network Authorization fee, Data Usage Charge, Program Integrity Fee, and Account Updated Fees. The Network Authorization fee will no longer be assessed on authorization requests for refunds.

Discover is updating several “credit voucher” interchange categories for debit cards (assigned to Discover refunds) so that no negative interchange will be returned to the merchant. This change will go into effect April 2021.  

American Express 
Amex is not removing or postponing any of their April 2021 changes. 

Those going into effect this spring include an increase in their Acquirer Assessment Fee (assessed on all settled Amex transactions) from 0.15% to 0.16%. 

Amex is also increasing their International Cross Border Fee (assessed on Amex cards issued outside of the US) from 0.40% to 1.00%. This is a significant increase and if a significant portion of your client base if from outside the United States, it is certainly something you should be on the lookout for on your future statements. 

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