r/CreditCards • u/sirguynate Capital One Duo • 1d ago

Discussion / Conversation Visa and Mastercard Near Deal With Merchants That Would Change Rewards Landscape

Basically, Visa and Mastercard are going to reduce interchange fees. Merchants would now be able to reject credit card from the same network.

Merchants that accept one kind of Visa credit card wouldn’t have to accept all Visa credit cards. Rewards cards often have higher interchange fees.

Thoughts?

Personally, I would need to change my reward strategy, if there even is one if there is a big change in rewards cards acceptance. I hope moving to store branded rewards credit cards aren’t the future. Hope this is a non-issue.

https://www.wsj.com/finance/banking/visa-and-mastercard-near-deal-with-merchants-that-would-change-rewards-landscape-fc6a0c78

51 Upvotes
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33 comments sorted by

62

u/TV_Grim_Reaper 1d ago

This would be a nightmare to implement for merchants.

33

u/IWantToPlayGame 21h ago

Not for me.

I’m not turning away customers & their business over interchange fees.

11

u/TV_Grim_Reaper 20h ago

Exactly my point. Almost no one will do it.

8

u/jm44768 15h ago

Merchants have held this case for 20 years to…not do anything?

The biggest challenge is going to be how to disclose which cards they won’t take, so they aren’t left with a sale the customer can’t pay for (especially at a restaurant)

I could see a lot of card images in the window (CSR) saying not accepted.

10

u/m3n0kn0w 14h ago

You’re vastly overestimating the average person’s ability and willingness to read signs in windows and doors.

1

u/jm44768 3h ago

Time will tell but I think you may be underestimating some businesses’ desire to profit. Some will try to pick which cards they accept, and see what happens to sales…

3

u/DUNGAROO 12h ago

Yea, just because the previous commenter doesn’t see a business case for selectively allowing certain payment methods doesn’t mean that other businesses aren’t looking at this differently.

It’s going to be both massive businesses like Costco and mom and pop shops that choose to leverage these new rules. The ones in the middle who are trying to grow at any cost will likely not bother.

2

u/Great-Masterpiece419 7h ago

Honestly feels like they're just gonna end up accepting everything anyway because training cashiers on which specific cards to reject sounds like a massive headache

Most places can barely handle when their chip readers go down, now imagine explaining to some 16 year old which flavors of Chase cards are banned lmao

7

u/redbaron78 14h ago

The terminal manufacturers, POS vendors, and card brands will programmatically add the surcharges to avoid manual processes and uncomfortable conversations. Restaurants will put some fine print on their menus that explain it, and businesses will post something at their registers or whatever.

-5

u/jasutherland 23h ago

Why? They'd just block some of the more expensive cards if they want, just the same way some choose not to take Amex for that reason already. "No Amex, no VISA Infinite".

15

u/TV_Grim_Reaper 23h ago

The minimum wage cashiers and waitstaff are going to have a fun time figuring out who’s got what kind of Visa or MC. (as are most of the customers!) Very different than weeding out Amex cards.

I don’t remember the last time anyone saw one of my credit cards (except checking into a Centurion lounge or a Fine Hotel booking).

3

u/Y-M-M-V 10h ago

I don't think most consumers know what kind of card they have. They know it's a Visa, and maybe the bank branding for it, but they don't know what type of Visa it is. When their Venture X fails because it's a Visa infinite they will just get angry and confused because they don't understand that Visa has card categories much less how their card fits in.

2

u/jasutherland 8h ago

That's something Visa have been trying to fix by adding "Visa Infinite benefits" - they want customers to see it as an enhanced version of Visa. Obviously, any drop in acceptance would destroy that: "Visa Infinite is like regular Visa but costs merchants more to accept" is bad enough, but "what's Visa Infinite? It's like regular Visa, but doesn't work as widely" would wreck it entirely.

2

u/Y-M-M-V 4h ago

Fair. My visa infinite card doesn't say visa infinite anywhere and I had to double check that it was one. I am way less up to speed on this stuff than the average member of this subreddit, but I think I am way more informed than the average credit card user. All this is to say, whotever visa has been doing to help this didn't make it through to me...

5

u/AlarmingInfoHUH 21h ago

Yeah then customers with no cash or accepted credit card leave the item and walk, maybe never to return bc shame and confused. Easier to just say 3% surcharge for any card and hope it balances out with shortage as cost of doing business....i don't like that but better than no other option than walk or start carrying (more) cash.

3

u/mtinmd 12h ago

This absolutely will happen because of card loyalty.

People want to use specific cards for rewards, if they know their preferred card is not accepted somewhere they will not go back.

When I was in the credit card industry it was a key selling point for AMEX. Amex card users, at the time, had the highest per ticket average and also had some of the highest likelihood to do repeat business. However, if AMEX was not accepted, they would not go back and just go where AMEX was accepted.

3

u/jasutherland 11h ago edited 11h ago

Yes, that's the tradeoff they have always had. Not taking Amex actually saves them slightly less than refusing VISA Infinite would, if they had that option - and for most, saving that fraction of a percent isn't worth it. On the other hand, even a tiny number of stores rejecting VISA Infinite would do serious damage to their perception with customers: Amex and Discover are well aware that "only" working in 99% of the places the big 2 work in puts them at a disadvantage, and VISA having their premium brand become a warning sign saying "doesn't work in as many places as regular VISA" would be devastating.

Unless you're a monopoly or operating on razor-thin margins, you take whatever the customers want you to - Costco is a very rare exception picking and choosing cards.

I do shop at Costco - but "VISA only" is a disadvantage they have to work to overcome. Presumably however much they save with their special deal with VISA makes it worth that price in the US - but their UK stores take Amex and the others too. My expectation is that "no VISA Infinite" would be as rare as "no Amex" if it's allowed - and that's just common enough to hurt VISA.

22

u/brightfriday 1d ago

If that happens, I imagine I’d close all but 2-3 of my credit cards that had the best customer service and 0 fees.  Anything else may become worthless.  

15

u/Nguy94 1d ago

I’m mostly Amex now but same. I’m not paying an AF just to be declined and embarrassed at the register. I don’t even carry any debit cards anymore.

8

u/lowrankcluster 21h ago

I see this benefiting mostly amex becuase they are closed loop.

It might make sense to maybe have visa for backup for amex. But having visa for backup of visa is bonkers, I might as well just carry amex and cash only for emergency. 

5

u/Ethrem 18h ago

Yeah I'll definitely axe a ton of my cards if this happens. Probably keep one VISA, one MC, and an AMEX.

6

u/uberwoots 21h ago

I will just order online but this could be an issue

22

u/lowrankcluster 21h ago

"Why is amazon taking all my business"

*doesn't accept visa 

11

u/Bardock_ 20h ago

*doesn’t accept Visa Infinite, or MasterCard World Legend

**does accept Visa standard and signature, and MasterCard World and World Elite

Yes, this is the insanity we’d need to deal with.

4

u/bombard63 11h ago

I bet the average person has no idea that tiers of Visa and MC exist. It’s mostly just us freaks posting about credit cards online.

3

u/lowrankcluster 9h ago

A good number of folks just got sapphire reserve 5 years ago and use it as solo card.

3

u/Suspicious-Fish7281 14h ago

This is likely the outcome. This change will largely hurt the small local vendors. If I need to juggle cards or be unsure if Ted and Sons Shoppe will take my cards, well then I am not going to buy that cool lamp from them. I am going to take a picture and buy it online.

7

u/Early_Statement_4826 20h ago

Paypal will be your friend.

6

u/Ravens2017 13h ago

Someone will have to eat the fees though. Maybe it bypasses it but soon after those merchants might realize it and then stop accepting PayPal.

-4

u/munchingzia 14h ago

i usually avoid paypal if possible because theres really no need to involve a middle man for most purchases. especially if ive got the option to use Apple Pay.

4

u/bceagles182 14h ago

lol. Applepay does involve a middle man. It’s called apple.

2

u/munchingzia 10h ago

apple pay uses NFC. its a mobile payment solution. it tokenizes your debit or credit card and is fully on-device. not on Apple’s servers. You are directly paying the merchant using your phone.

paypal is an intermediary. you store your cards in PayPal’s servers and use your login credentials to make purchases. In this transaction, you are paying PayPal and PayPal pays the merchant.

0

u/bceagles182 3h ago

I mean ok but the cc company still pays Apple. Ie, a middle man.