Credit card processing networks like Visa and Mastercard launch major updates twice per year — once in the spring and once in the fall. This spring, card networks have made important changes to their fees, which can impact how businesses accept payments and stay compliant with network rules.
PayPal Braintree understands the importance of staying ahead of the curve and navigating complex shifts in the payments landscape, and we’ve identified the key updates you need to know for Spring 2024.
These rules affect every entity within the payments ecosystem, from banks to merchants to PSPs like Braintree.
It’s critical to comply with these changes, otherwise businesses potentially risk facing additional fees, decreased authorization rates, and processing interruptions.
Braintree has identified key card network updates from Visa and Mastercard that will affect businesses across the globe this spring. Regions in scope for each update are identified. These updates go into effect April 2024.
Breaking this information down further, there are a few key themes and future updates that businesses should be aware of:
Visa will introduce a Digital Commerce fee in certain APAC markets to help improve CNP transactions and performance. Specifically, a fee of 0.75 basis points (0.0075%) will be applied to domestic and cross-border CNP transactions starting July 1, 2024. The fee includes bundled access to a number of services, including VDCU, VAU, DAF and CVV2. This fee is very similar to the Digital Commerce Services fee that launched in the US in October, however, the bundled services are different between regions. Mastercard will raise the rates of cross-border assessments in the AP region. Fee is being raised from 45bps to 125bps.
Effective July 1, 2024, Mastercard is raising two fees for select EU countries: Interregional cross-border fee and interregional card not present (CNP) fee. The Interregional cross-border fee will be raised to 75bps. The interregional CNP fee will be raised from 5 to 15bps.
Effective 7/1/24 (AP) and 10/7/24, Mastercard will add fees of 2bps domestic and 10bps cross-border to all approved tokenized transactions. This fee is applicable to AP and EU countries.
What action do businesses have to take?
Businesses may have to make certain changes to their payment processes to avoid new fees and maintain card network compliance. For example, businesses might consider leveraging 3DS solutions and the benefits of network tokenization to help improve payment security and authorization rates. Businesses can also work with their payments processors to better understand Visa’s retry rules and fees and minimize the impact of card network changes.
PayPal Braintree aims to support businesses, collaborating with card networks, acquirers, and organizations like the Merchant Risk Council (MRC) to streamline the payments process for everyone involved. Braintree aims to create an equitable payments ecosystem where both businesses and card payment networks can meet their goals and improve customer experiences.
As the payments landscape evolves, PayPal will continue to advocate for simplified fee structures and transparency, so businesses can maintain compliance and minimize the impact of card network updates.
Are you ready for the latest changes from Visa and Mastercard? Learn more about how to optimize payments with PayPal Braintree and review the key 2024 updates on our Developer Docs.
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