Visa and Mastercard are set to raise credit card processing fees in October 2023 and again in April 2024. So, many small business owners are, of course, concerned about the impact these hikes will have on their bottom line. While larger retailers may be able to absorb the extra costs, for smaller merchants running on tight margins, even fractional increases dig deep into profits.
Understanding these upcoming changes and strategizing how to mitigate the effects of higher processing fees are crucial for merchants in the coming months.
Here’s what business owners need to know.
New fees and caps
The Durbin Amendment already allows merchants in most states to pass on a portion of credit card processing fees to consumers. However, as of January 2023, the cap on the amount merchants can pass on dropped from 4% to 3%.
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