As a payments consultant, I have researched and reported on the massive and complex intricacies of Visa and MC interchange rates, and organized negotiation sessions with the card schemes for negotiation of merchant swipe fee rates. Given the complexities of the rates structure (rates can vary by card product, by region, by vertical, by merchant velocity, etc. as well as by card scheme promotions, market targeting and precedents), I have found that there can be a number of opportunities for swipe fee rate reductions from the card schemes. Equally important, the complexity of the swipe fee structure can result in processor misallocation of swipe fee rates to card transactions being processed, which might also result in reduced swipe fee charges for the merchant. All of the above however, is tinkering with the existing system, not changing the payments processing fees paradigm as your very interesting article discusses.
Great article and well articulated. I think you raised some interesting points but I’d love to hear your perspective on how lower interchange fees would impact all the Fintechs that rely on interchange to fund their no fee banking services?
As a payments consultant, I have researched and reported on the massive and complex intricacies of Visa and MC interchange rates, and organized negotiation sessions with the card schemes for negotiation of merchant swipe fee rates. Given the complexities of the rates structure (rates can vary by card product, by region, by vertical, by merchant velocity, etc. as well as by card scheme promotions, market targeting and precedents), I have found that there can be a number of opportunities for swipe fee rate reductions from the card schemes. Equally important, the complexity of the swipe fee structure can result in processor misallocation of swipe fee rates to card transactions being processed, which might also result in reduced swipe fee charges for the merchant. All of the above however, is tinkering with the existing system, not changing the payments processing fees paradigm as your very interesting article discusses.
Great article and well articulated. I think you raised some interesting points but I’d love to hear your perspective on how lower interchange fees would impact all the Fintechs that rely on interchange to fund their no fee banking services?