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As merchants complain about Visa’s high transfer fees, experts take a look at the company’s role in the retail market

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Americans are increasingly using plastic to spend their money, allowing Visa to increase its dominance in credit and debit cards.

In the United States, people spent $ 6.7 trillion on credit and debit cards in 2019, up 88% from 2009, according to a 2020 report by HSN Consultants. Of these transactions, over 60% were made with Visa cards.

This has helped Visa to become one of the most valuable companies in the world. As of October 19, Visa had a market valuation of over $ 491 billion. Its shares have also grown by more than 170% in the past five years.

However, some retailers argue that Visa’s success has come at the expense of the merchants who rely on them to process payments. Some have even said that the fees imposed by Visa are too high for businesses to survive.

“I know a lot of business owners and it saddens me because so many people accept it for what it is,” said Jared Scheeler, CEO of Hub Convenience Stores. “These prices are so ridiculous. The amount we are paying in transfer fees is so high that we have to do something, someone has to do something.”

Sweeping fees collected by Visa and Mastercard climbed to $ 67.6 billion in 2019, from $ 25.6 billion in 2009, according to data from the National Retail Federation. Overall processing fees paid by U.S. merchants to accept all card payments jumped to $ 116.4 billion in 2019, up 88% from 2009.

“This is a central part of the problem with their dominance,” said Doug Kantor, executive committee member of the Merchants Payments Coalition. “The exact way they were set up was to be this dominant pricing entity and the fact that it’s been going on for so long is a problem for everyone in the economy.”

Visa declined to comment for this story.

Certainly, those who support Visa claim that the company is on the side of the merchants.

“Visa on some level is a victim of their own success in the sense that they’re so ubiquitous and so secure and easy to use that people are starting to take it for granted,” said Lisa Ellis, analyst at MoffettNathanson. “Visa’s business structure is very balanced and if anything is really skewed, believe it or not, in favor of merchants. They actually derive the majority of their income from the banks and the ecosystem that supports merchants.”

Watch the video to learn more about how Visa makes money.

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