China is advocating for Visa and Mastercard to decrease their bank card transaction fees in the country, aiming to boost spending by foreign visitors, Bloomberg News reported, citing a source familiar with the matter. The Payment & Clearing Association of China has proposed reducing the fees on foreign card transactions to 1.5% from the current 2-3%, potentially reducing costs for tourists in China.
While merchants typically bear the fees charged by Visa and Mastercard, they often pass these costs on to customers through price increases. Regulators worldwide have been working to regulate the fees these companies charge merchants for processing transactions. Earlier this year, Visa and Mastercard reached a significant settlement in the U.S. to limit credit and debit card fees, although a New York judge has signaled reluctance to approve the agreement, prolonging litigation over the fees.
Mastercard acknowledged receiving the proposal from the Payment & Clearing Association of China and expressed intent to collaborate with partners to reduce costs for local merchants accepting foreign bank cards. Visa and Mastercard have yet to respond to Reuters’ requests for comment. Despite these developments, both companies’ shares have seen gains of more than 6% each so far this year.
Source: Reuters