Q: Why is my Visa Debit rate changing?
A: Following on from EU regulation introduced at the end of 2015 Visa has recently announced changes to the interchange costs charged to card payment providers for Visa Debit transactions. These charges will now become a flat percentage fee. Consequently, for businesses with a high average transaction value the interchange costs associated with processing this type of transaction have increased. Due to this change your Visa Debit fee will be adjusted to a new percentage based fee.
Q: How will the recent EU Referendum results & the announcement of the United Kingdom leaving the EU (Brexit) affect these changes?
Q: Are these price changes linked to the United Kingdom leaving the EU (Brexit)?
A: Worldpay have announced these price changes in light of EU regulation introduced at the end of 2015.
These changes are card payment industry wide, and the recent EU Referendum has no immediate impact to the way the Card Schemes charge interchange costs for processing transactions.
For more information Worldpay’s official response to the EU Referendum can be found in the Media Centre on our website here
Q: What will the impact of the EU Referendum be on interchange?
A: There is no certainty that Interchange costs will change once the UK’s exit from the EU is completed. It would be up to the new national government to determine how it wants to regulate Interchange, and whether it wanted to alter any of the previously enacted legislation. As has been covered in the press, the formal process for leaving the EU will be lengthy, taking around 2 years, and therefore existing regulation will remain in force at least until this process is complete.
Q: Why has my Visa debit fee moved from a pence per transaction fee to a fee which is percentage based?
A: In 2015 Visa Debit and Electron transactions moved from a pence-per-transaction charge to a fee that was mainly percentage-based. However, at that time, there was a cap on the total interchange charge applicable to any individual debit card transaction. As you accept a large volume of Visa Debit cards and have a high average transaction value we moved you to new pence per transaction fee to limit the impact of the change to you and to cover the costs to us. Unfortunately, due to Visa’s new interchange rates it is no longer sustainable for us to price in this way and your Visa Debit rate will be moved from a pence per transaction fee, to a charge which is percentage based. This will increase your costs for these card types.
Q: My Visa debit fee was already a percentage. Why has it now gone up?
A: Your current Visa debit charges were priced to take account of the Visa debit interchange rules that are currently in place until September. When Visa’s new rates come into effect after this date, depending on your transaction mix, the average interchange cost associated with your Visa Debit transactions may increase and your fee has been adjusted accordingly. We have also taken the opportunity to review debit prices across our customer base to better align debit pricing between similar customers.
Q: How will this change affect me?
A: The extent to which this will impact you will depend on the volume and average transaction value of Visa debit and Electron card payments you take. We expect that customers with a high average transaction value will see an increase in their cost for processing a Visa Debit or Electron transaction as a result of moving to a new percentage rate.
Q: I’m aware that my new rate is higher than other companies are being charged why is that?
A: The new % rate for a Visa Debit transaction will vary from company to company based on its turnover, volume and average transaction value. For companies where average transaction sizes are low, the % rate we charge may be higher to reflect fixed cost elements.
Q: I pay additional charges for premium transactions, will these still apply.
A: Yes, where charges for premium transactions are in place these will still remain to reflect the fact that premium transactions are typically less secure and may attract additional ‘scheme fees’.
Q: When will these changes take effect?
A: Your new fee structure will apply from 1st September 2016 and you will see these changes detailed in your September invoice, delivered the first week in October 2016.
Q: Where can I find more details about the VISA Debit card changes?