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Visa's raising card payment fees, and small businesses will be worst hit
Card payments are booming in the UK. Last year, the number of card transactions finally overtook cash payments – and the value of card transactions is growing every year.
Now Visa, one of the biggest card payments organisations in the world, is cashing in. Visa will be hiking fees to raise an extra £1 billion a year from British shopkeepers.
Visa payment fees to double, on average
The fee hike will be most harmful to retailers who rely on a large number of small transactions – like high street shops and cafes. That’s also the main growth area for card payments, as customers have started paying by card even for cheap items.
The price increase could see card payment bills rise significantly over the course of the year. According to payments consultant CMSPI, the average Visa fee will double from 4p to 8p per transaction.
Now that businesses are barred from levying fees on card payments, after a change in legislation earlier this year, there’s little they can do to mitigate this cost.
Visa is the second biggest payment service company in the world, surpassed only by UnionPay. Outside of China, it has around a 50% market share of global card payments.
Visa Europe, which operates in the UK, has grown increasingly aggressive after being bought by the U.S.-based Visa in 2016.
It now faces criticism from MPs and business groups, who accuse the company of using its monopoly power to charge an unfair price on businesses.
Keep your card costs low
With the increase in card fees, it’s more important than ever to shop around for the right card terminal provider.
Though there’s not much providers can do to stop the Visa price increase, there are other offers – such as free rental periods for terminals – that can help businesses swallow the costs.
At XLN Pay, we offer small business-friendly deals on card machines and portable payments. You can find out more at https://www.xln.co.uk/pay.