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Visa and MasterCard Introduce Pricing Restructure |
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New Higher Rates for Consumer Cards with Cardholder Benefits |
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As you may have already heard, Visa and MasterCard used their April 2005 pricing release to re-structure their
prices. How consumer credit transactions qualify for interchange is now based, in large part, on the type of card used at the point
of sale. Instead of using just one category to rank each consumer credit rate, Visa and MasterCard introduced new consumer credit
rate structures based on card products, divided into multiple categories.
Under the new rules, even if a credit card transaction previously was charged the lowest rate, if the consumer uses a Rewards,
Signature or World card, the transaction will no longer necessarily qualify for the lowest rate possible.
There are now three different interchange levels within each Visa interchange category. The applicable rate is dependent not only on
the conventional interchange criteria, but will also on whether a customer uses a Visa Rewards or a Visa Signature Card.
New Visa Categories
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Traditional - Consumer credit card types that do not offer rewards or meet the Visa Traditional Rewards
threshold. |
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Traditional Rewards - Consumer credit card programs that offer various rewards programs and meet Visa standards
for the Traditional Rewards program. These cards may not have names or logos that indicate they are Traditional Rewards cards. |
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Visa Signature - Includes all card products offering Visa Signature level rewards. These cards are clearly
marked with the Visa Signature brand. |
New World MasterCard Card Categories
Similarly, your MasterCard Interchange rate will now be dependent not only on the conventional Interchange criteria, but will
also depend on whether your customer uses a World MasterCard card. MasterCard has created the following new Interchange
categories to introduce these new rates. Each of the categories below will have a different rate for World MasterCard card
transactions than for MasterCard transactions that are not World cards.
| World MasterCard Standard |
World MasterCard Supermarket Base |
| World MasterCard Merit I |
World MasterCard Warehouse Club Base |
| World MasterCard Key-Entered |
World MasterCard Service Industries |
| World MasterCard Merit III Base |
World MasterCard Public Sector |
| World MasterCard Convenience Purchases |
While approximately 53 percent of the credit cards used today are rewards cards, it may be difficult to predict the impact of these
new pricing structures on your business, because the price you will pay depends in large part on the types of cards your customers
use when they pay.
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