An overview of the October 2024 credit card processing rate and rule changes.
Every year in April and October, the card brands update processing rates and rules. This is a summary of the rate and rule changes that will impact the broadest number of merchants.
Visa
Fee Changes
New Small Merchant Supermarket Interchange Rates - US
Effective October 18, 2024, Visa introduced new interchange rates for card present consumer credit transactions for small merchants in Merchant Category Code (MCC) 5411 – Grocery Stores and Supermarkets. To qualify for these rates, a merchant needs to process $280,000 or less in annual gross domestic consumer credit card sales, cannot apply a surcharge on the transaction and must meet the requirements for either the CPS/Supermarket of CPS/Small Ticket Interchange programs.
| Product | Rate |
|---|---|
| Visa Traditional | 1.50% + $0.07 |
| Visa Traditional Rewards | 1.50% + $0.07 |
| Visa Signature | 1.65% + $0.07 |
| Visa Signature Preferred | 2.00% + $0.07 |
| Visa Infinite (Spend Not-Qualified) | 1.65% + $0.07 |
| Visa Infinite (Spend Qualified) | 2.00% + $0.07 |
Changes to Visa Corporate and Purchasing Interchange Programs for Fleet and Fuel Merchants -US
Effective October 18, 2024, Visa replaced existing Level 2 and Level 3 interchange programs for fleet and fuel merchants with new Level 2 and Level 3 interchange programs. The interchange rates are unchanged. Fleet and Fuel merchants in the following MCC’s are affected:
- MCC 4468 – Marinas, Marine Service and Supplies
- MCC 4582 – Airports, Flying Fields and Airport Terminals
- MCC 5172 – Petroleum and Petroleum Products
- MCC 5499 – Miscellaneous Food Stores – Convenience Stores and Specialty Markets
- MCC 5541 – Service Stations
- MCC 5542 – Automated Fuel Dispensers
- MCC 5552 – Electric Vehicle Charging
- MCC 5983 – Fuel Dealers – Fuel Oil, Wood, Coal and Liquefied Petroleum
- MCC 7523 – Parking Lots, Parking Meters and Garages
- MCC 7542 – Car Washes
Policy Updates
Updated Fraud and Consumer Dispute Rules - US
The following rule changes impact disputes processed on or after October 19, 2024.
Use of Compelling Evidence
- For card-not-present (CNP) transactions, or for pre-arbitration attempts processed on or after October 19, 2024, merchants can supply three or more of the following data elements for Allowable Compelling Evidence from an undisputed transaction when attempting to demonstrate the cardholder participated in the disputed transaction.
- Customer account/Login ID
- Delivery address
- Device ID/device fingerprint
- Email address
- IP address
- Telephone number
Dispute Condition 10.4: Other Fraud – Card Absent Environment
- Merchants only need to provide the date the merchandise or services were provided.
Dispute Condition 11.3: No Authorization
- Merchants do not need to provide a copy of the transaction receipt, or substitute transaction receipt with a pre-arbitration attempt for disputes related to late presentments. The only information that needs to be provided is the date the transaction was initiated, the date the transaction was completed, and the authorized amount/authorization code of the approved authorization(s).
Dispute Condition 12.6: Duplicate Processing
- Requirements were updated to specify that merchants will need to provide two separate transaction receipts (or other record) to prove that both the accepted and disputed transactions represent the purchase of separate merchandise or services.
Dispute Condition 13.1: Merchandise/Services Not Received
- Clarification was added to indicate the 15-day calendar day waiting period does not apply if the merchant is insolvent or bankrupt.
- To address confusing requirements, it was clarified that in disputes where the merchandise was delivered to the wrong location, the cardholder is not required to attempt to return the merchandise. If the merchandise was delivered late, the requirement for the issuer to provide the date the cardholder returned, or attempted to return the merchandise, remains unchanged.
Dispute Condition 13.2: Cancelled Recurring Transaction
- Disputes for a transaction the cardholder states is fraudulent, or for a cardholder-initiated transaction are invalid. When responding to a dispute, merchants are allowed to provide evidence that the cardholder used the services after the withdrawal date and prior to the dispute processing date.
Dispute Condition 13.3: Not as Described or Defective Merchandise/Services
- Cardholders must return merchandise or cancel services. Unsuccessful attempts to return merchandise are only valid if one of the following applies:
- Merchant refused the return of the merchandise
- Merchant instructed cardholder not to return the merchandise
- Merchant no longer exists or is not responding to the cardholder
- Merchant did not provide clear instructions on how to return the merchandise
American Express
Fee Changes
New Interchange Rates – Opt Blue -US
Effective October 19, 2024, American Express amended interchange rates for Utility merchants in the Opt Blue program.
There were no changes to Tier 1.
Tier 2 , which was for transactions >$1,000, now has a maximum transaction limit of $5,000 and the fee changed from 1.50% to $1.50.
A new tier – Tier 3 – was added and applies to transactions over $5,000 with a fee of 2.30%.
The updated Opt Blue tier structure for Utilities merchants (MCC 4900) is as follows:
| Tier | Transaction Amount | Rate |
|---|---|---|
| Tier 1 | ≤ $1,000 | 0.00% + $0.75 |
| Tier 2 | > $1,000 to $5,000 | 0.00% + $1.50 |
| Tier 3 | > $5,000 | 2.30% + $0.00 |
Policy Changes
Variable Authorizations
Effective October 11, 2024, American Express introduced a suite of new policies intended to streamline the way that merchants do business with American Express while helping improve the cardmember experience:
The new capabilities will give merchants and third-party processors the ability to request an increase or decrease in the overall authorized amount prior to submitting the transaction. According to American Express, this will facilitate additional cardmember spending at the merchant, reduce excess holds against cardmember accounts and minimize authorization declines. Details are available in the October 2024 American Express Merchant Regulations.
Visa Hit with Debit Card Antitrust Suit
On September 24th, the US Department of Justice (DOJ) filed a civil antitrust lawsuit against Visa, accusing it of illegally monopolizing the US debit card market. The DOJ alleges that Visa has engaged in illegal activity, dating back to 2012, which has “resulted in billions of dollars in additional fees imposed on American consumers and businesses and slowed innovation in the debit payments ecosystem.”
According to the DOJ, 60% of US debit transactions go through Visa’s network, generating more than $7 billion of fees for the company on an annual basis.
It is alleged that Visa used pricing, volume discounts, and prohibitions on the use of competing debit networks to impede the growth of competitors. Additionally, Visa is accused of seeking to undermine startups that posed a competitive threat, as well as paying companies, including Apple, to limit payments innovation. The lawsuit seeks to end Visa’s anticompetitive practices but does not seek the break-up of the company.
Visa vowed to vigorously defend itself in court, calling the lawsuit “meritless.” Litigation is expected to continue for several years. Shortly after the lawsuit was filed, Visa added $1.5 billion to a litigation escrow account.
In October, Visa was hit with a new merchant class action suit piggybacking on the DOJ lawsuit. Advertising and marketing company All Wrapped Up Signs and Graphix filed the proposed class action suit.
For more information see:
