Price Changes for MasterCard
MasterCard has announced an assessment increase which took effect January 1, 1997, and an interchange increase that will take effect April 4, 1997, that will have significant impact on restaurant, hotel, and car rental clients, according to Randy Ridings, Senior Vice President at First Bank, Corporate Payment Systems in Minnesota. "The real kicker for the market is the massive restructuring of the Corporate and Purchasing card interchanges," reports Ridings.
Highlights of the major impact as reported by Ridings are:
1. Assessments have gone up .005% (1/2 of one basis point) from .09% to .095%.
2. The interchange increase for Merit III (retail, face-to-face) has gone up .01% (one basis point) from 1.31% to 1.32%.
3 . The .005% assessment and .01% Merit III increase adds up to an overall .015% increase and blends out to .006% assuming that MasterCard has a 40% share of the bankcard market.
There are also the following changes:
1. There is a newly created interchange for retail key-entered transactions (Mail order, Telephone Order), set at 1.41 % and $.10.
2. Merit I has gone up $.0l from 1.61% and $.09 to 1.61% and $.10.
3. Standard has gone up .06% from 2.09% and $.10 to 2.15% and $.10.
No pricing changes were announced for Supermarket, Warehouse Club, Petroleum, Lodging & Cruise, or Vehicle Rental categories.
We understand that VISA has also planned a restructuring of interchange later this year.
