Visa and MasterCard Make Their Money on PIN-based Debit Transactions
January 5, 2009 
Posted by In previous posts I have talked about Visa and MasterCard turning to Debit and prepaid cards to re-coop money lost on defaulted credit cards. These types of cards used to be the cheapest form of electronic payment a merchant could accept – that seems to be changing these days.
It is estimated that PIN-based debit transaction Interchange costs have gone up nearly 85% in the last year alone. The rise could be attributed to a large consolidation between debit networks. Whenever there is consolidation, there is typically less competition and the result is higher PIN-based debit costs to processors and higher interim costs to merchants. Interlink’s current fee is nearly $0.76 per transaction and Pulse’s is over $0.64. Many merchants have become accustomed to paying flat fees for PIN-based debit transactions but in the coming years that will be a thing of the past.
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