Visa is delaying previously announced interchange and fee changes until April 2021, except for changes in the supermarket category, which will remain on the same schedule.
That’s the same month to which Visa and American Express have pushed back gas station EMV migration deadlines. The previous EMV deadline for gas stations was October.
“We believe this is the right decision to ensure the long-term stability of the digital payments ecosystem,” Visa said in an announcement, which also publicly confirmed its gas station EMV delay.
The delays show the dramatic impact the coronavirus has had on long-standing technology issues that require multiyear implementations, such as finishing the migration to chip and PIN cards, or rolling out new standards for faster payment processing.
These moves involve complex projects and investments that have been hindered as the virus has curtailed travel, temporarily closed businesses and disrupted supply chains.
Merchants and the card networks have fought over interchange fees for years, with numerous court battles over interchange’s effect on competition for payment processing. Both Visa and Mastercard floated new changes as early as February 2019, causing a new round of pushback.
More than six industry events have been cancelled or put on hold in five days, with more likely to follow.
The central bank is trying to get ahead of possible funding disruptions caused by the coronavirus. Policymakers want to avert a repeat of September, when short-term borrowing costs spiked amid imbalances in supply and demand for cash.
Prices for major term loans issued by operators such as Marriott International, Hilton Worldwide and Caesars Entertainment have fallen in recent weeks as investors grow worried about the impact of the COVID-19 outbreak on global tourist and business travel.
Visa in February said it would update fees, with some fees going down while fees for card-not-present, mobile and premium cards going up. As the coronavirus took hold, merchant groups started to push for a delay, contending the fee changes would disrupt businesses at a time of lower payment volume.
“This is positive news for the merchant community as it gives them needed relief from incremental expenses of accepting payments,” said John Drechny, CEO of the Merchant Advisory Group, in an email. “We appreciate Visa hearing the concerns from the merchants and moving in a direction which provides relief.”
