CARPENTERIA, Calif. – Interchange fees actually declined last year because of the recession’s effect on retail sales, but are far larger than previously believed, almost $63 billion for 2009, according to the Nilson Report, a credit card newsletter.
The data, including for the first time interchange earned by American Express, Discover and private label cards, as well as MasterCard and Visa, shows that processing fees paid by U.S. merchants in 2009 to accept payment for $3.7 trillion in goods and services purchased declined 1% to $62.1 billion from 2008. The decline, according to Nilson, came from a 2.3% drop in purchase volume from the previous year.
The fees are paid by consumers and split three ways: between the acquiring banks, the credit card networks and the card-issuing credit unions and banks.
Total fees going through MasterCard and Visa for credit card transactions were $25.6 billion for 2009, with an average fee of 2.06% of the cost of each transaction.
Total fees going through the two networks for debit transactions were $19.7 billion, with an average fee of 1.63% of the cost for each transaction.
American Express processed $9.4 billion in interchange with an average charge of 2.23%; and Discover $1.9 billion at 1.88% per transaction.
Credit unions are believed to receive about a tenth of the fees going through the MasterCard and Visa networks, meaning about $4.5 billion for both credit and debit transactions.
