Visa Inc. (NYSE:V) and Mastercard Inc. (NYSE:MA) have reportedly been asked by China to lower their bank card transaction fees.
What Happened: The Payment & Clearing Association of China is reportedly negotiating with these international card issuers to decrease fees on foreign card transactions, Reuters reported on Friday. This is part of a broader initiative to simplify payments for international visitors in China.
According to a report released on Friday, the association has recommended a fee reduction from 2-3% to 1.5%. Mastercard has acknowledged receipt of the proposal and has pledged to work with partners to reduce costs for local merchants that accept foreign bank cards.
Earlier this week, the industry group proposed a fee cut to global card issuers, as revealed in a statement on its website on Tuesday. However, the exact details of the price cut were not disclosed.
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Why It Matters: This development comes in the wake of Mastercard’s decision to increase specific credit card fees in April, shortly after a $30 billion settlement with Visa over swipe fees. This move was aimed at providing financial relief to retailers.
In May, Visa and Mastercard came under scrutiny in the U.K. for their fee increases, which did not result in significant service improvements, according to the provisional findings of Britain's Payment Systems Regulator (PSR).
Later in May, Mastercard partnered with Ant Group to enhance the travel experience for global travelers and stimulate growth for local businesses in China.
Price Action: As per Benzinga Pro, on Thursday, Visa shares closed 1.17% higher at $276.82, with a 52-week range of $224.98 – $290.96. On the same day, Mastercard shares closed 0.53% higher at $452.51, with a 52-week range of $359.77 – $490.00.
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Photo by In Green via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
