Visa Inc. said Thursday that it was lowering its interchange rates for gas purchases and changing the way it processes such transactions.
The San Francisco company, which last updated its interchange rate schedule in April, said cutting such rates at the pump would "result in benefits for American consumers and fuel merchants" affected by sharp increases in oil prices. (The Associated Press reported last week that some gas stations had begun refusing to take credit cards.)
On July 18, Visa will cap interchange for fuel transactions made on consumer debit cards at 95 cents per transaction. And in October, it will put into effect a "system-wide" restructuring of interchange for all consumer credit card gas purchases "into a single, lower rate" of 1.15% plus 25 cents per transaction. In the meantime, Visa said, it is "willing to work with fuel merchants and their acquirers individually to process credit transactions at these lower rates."
(As of April, the interchange on Visa debit transactions for automatic fuel dispensers and at service stations was 0.70% of the transaction plus 17 cents. For credit transactions, they ranged from 1.43% plus 10 cents to 2.10% plus 10 cents, depending on the type of card.)
Bill Sheedy, Visa's global head of corporate strategy and business development, said in a press release that "we hope to see oil companies pass these savings along to their stations and ultimately to consumers."
(MasterCard Inc. said that in April of last year it placed a cap on interchange fees for consumer credit and debit fuel transactions of "about $50 or more.")
Also beginning July 18, Visa will allow "consumer fuel transactions up to $125 to qualify for its best-available interchange rates." The network said that this would be an interim step until the October implementation of a "real-time clearing" process that would enable quicker processing of fuel transactions.
In a separate press release, Senate Majority Whip Dick Durbin, D-Il., praised Visa's move — and used it as an opportunity to stump for legislation he has sponsored that would regulate interchange.
"Visa's announcement is a positive step and an acknowledgment that high interchange fees are hurting merchants and consumers," he said. "Congress needs to pass meaningful and comprehensive reform of interchange fees."