MasterCard International said Wednesday it will raise the fees that some banks pay others to process credit card transactions.

The announcement, similar to one made by Visa U.S.A. two months ago, could significantly increase costs for banks that specialize in working with merchants. However, banks are likely to pass along the price increase to retailers that accept credit cards, industry observers said.

MasterCard's move affects the interchange fee that a merchant's bank pays to a cardholder's bank on every card transaction. The fee is imposed to offset the high costs of running a cardholder business.

Rise of Almost 4%

The revised MasterCard fees, effective next April, represent an increase of just under 4%, said Daniel Fox, a senior vice president at the New York-based card group. Visa's will rise by a similar amount in April

The interchange hikes are the first levied in two years by the groups. They held rates steady last year as merchants publicly rebelled against the high cost of accepting American Express cards. The interchange rates charged by Amex remain higher than those of the bank card groups.

But growing credit losses among issuers and higher processing fees prompted adoption of what the bank card groups refer to as "cost-based" pricing schedules.

"We deliver a great deal of value to merchants, and it's still below cost," Mr. Fox said. "We have to continue our plan to migrate to full-cost interchange."

Mr. Fox described the 1993 price increase as modest, saying merchants are unlikely to object.

High-Tech Firms Pay Less

Visa and MasterCard calculate their interchange fees in different ways. MasterCard fees are based primarily on the way transactions are processed. Banks that use the most sophisticated electronic technology are charged lower fees than those that are more labor intensive.

Visa, by contrast, varies its interchange pricing by merchant category as well as by processing method.

Under the new MasterCard price schedule, standard interchange rates will be 2.18% of sale plus 10 cents. For a $65 transaction, a merchant's bank would pay a card-issuing bank about $1.52, compared with $1.43 under the current schedule.

Visa's standard fees - 2.0% of the transaction plus 11 cents - remain lower. For the same $65 transaction on a Visa card, a merchant bank would pay $1.41 as of April, up from $1.35 now.

Most banks actually qualify for lower interchange rates, but MasterCard also is raising some of its qualifying requirements for the discounts. For example, its "Merit III" interchange fee for highly automated processors will remain at 1.3% of a card sale, but under the new standards transactions must be cleared in two days. That's up from three days currently.

According to Mr. Fox, about 65% of all MasterCard transactions will qualify for Merit III fees.

Both Visa and MasterCard are raising interchange rates for business card transactions. The groups are encouraging bank issuers to promote their business cards more aggressively.

How worried should merchant-focused banks be about the escalating fees? Mr. Fox said the trend does not necessarily mean that interchange fees will continue to rise.

"Over the past 10 years, there have been nine or 10 times when they have been lowered," he said.

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