Visa Outlines Massive Changes to Swipe Fee Structure

Visa’s proposed changes will increase swipe fees for most merchants, but reduce them for certain categories including education and supermarkets.

Need to Know

  • The biggest changes in a decade will affect Visa’s interchange rates —commonly known as swipe fees—and will vary depending on the type of transaction and merchant account classification. 
  • Most rates will see increases, however, retailers in certain services categories like real estate, supermarkets, and education will see fees decline.
  • For premium-card purchases above $50 at large supermarkets, the interchange fee will drop 33%, to $0.77 from $1.15.
  • In 2019, Visa credit cards were accepted at 61 million locations around the world.
  • Merchants pay more than $100 billion per year in swipe fees each year. 


Visa’s proposed changes to their swipe fees, which are fees the merchant is charged every time a consumer uses a card, marks the biggest change in a decade for the financial services company. 

According to a document sent to banks outlining the changes, fees will go up and down depending on the merchant and the way a consumer pays. Areas like e-commerce will see increases to their fees while education and real estate will see fees drop. 

“The U.S. credit interchange structure has been largely unchanged for the past 10 years,” Visa said in the document, which was seen and reported in by Bloomberg. “Based on the most recent review in the U.S., Visa is adjusting its default U.S. interchange rate structure to optimize acceptance and usage and reflect the current value of Visa products.” 

With merchants paying more than $100 billion per year in swipe fees small increases add up quickly. The rise of premium cards with big membership perks and higher swipe fees make the topic of interchange rates is a point of contention with many merchants. 

Bloomberg reports that for traditional Visa cards, the fee on a $100 transaction will increase to $1.99 from $1.90. For premium Visa cards, the fee will rise from $2.50 to $2.60. Merchants can expect to see a drop in the services category that includes large supermarkets. On a premium-card transaction of $50, the interchange fee will drop 33%, to 77 cents from $1.15.

Although Visa’s proposed increases may have some merchants displeased, it optimizes the usages and adoption of many of its services, including the payment company’s digital wallet capabilities. Positioned as a more secure way to shop, Visa’s digital wallet brings cardholders different Visa accounts and cards together into one secure digital wallet protected with one password. With rates dropping in many service categories, cardholders can expect to see a push in Visa adoption in businesses operating under those categories. 

Another reason Visa is lowering swipe fees for certain services categories? American Express is quickly catching up to Visa in acceptance rates, adding over one million merchants in 2019 alone. American Express offered sign-on bonuses of up to $450,000 for some businesses, so if Visa lowers its swipe fees, it may entice those businesses to stay with Visa and keep American Express and its traditionally-high fees out.

Visa’s fiscal first-quarter 2020 reports show a net revenue of $6.1 billion, an increase of 10%. Processed transactions, the type of transactions that may be affected by the swipe fee increase, were up 11%. 

Visa plans to roll out the changes in two phases throughout April and October.