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From Visa and Mastercard adjust interchange rates and introduce new domestic fees

How could Visa and Mastercard's fee adjustments affect American Express's market position?

Possible What happens if… A possibility worth considering, not a forecast.

American Express may need to adjust pricing amid Visa and Mastercard's fee shifts The announced changes by Visa and Mastercard are altering the cost structure for small businesses, which directly impacts the competitive environment for American Express. While Visa and Mastercard have lowered interchange fees for small businesses under certain thresholds, they are simultaneously introducing a new 1.8-cent USD fee on domestic transactions. As a direct competitor in the global payments market, American Express may need to adjust its own pricing or service offerings to retain small business market share against these evolving fee structures.

Reported by 1 independent outlet Written Oct 14
Effect
Mild negative
How direct
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When
Within weeks
The story
Gone quiet

How it reaches American Express

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The facts so far

As reported. Each one links to where it comes from.

  • Visa and Mastercard lowered interchange fees for small businesses with sales under $300,000 for Visa and $175,000 for Mastercard.aol.com
  • Visa has announced plans to join Mastercard in assessing a new 1.8-cent USD fee on all domestic transactions.aol.com
  • Mastercard will expand the 1.8-cent fee to all transactions starting this week.aol.com
  • Visa intends to levy the exact same 1.8-cent amount starting in April 2027.aol.com

Why it matters

American Express operates in a highly competitive global payments market, directly competing with Visa and Mastercard. The reported changes in fee structures—specifically the expansion of lower rates by Visa and the introduction of new domestic fees by both major players—create a dynamic environment where pricing decisions are critical for maintaining market share among small businesses.

This situation reflects ongoing industry pressure, as the Canadian Federation of Independent Business has been pushing for fairer credit card fees for small businesses for two decades. The shifts by Visa and Mastercard highlight the tension between reducing interchange fees that go to issuing banks and increasing their own slice of the payment fees, which ultimately affects merchants.

What we don't know yet

  • Will American Express respond to the new 1.8-cent fee structure by adjusting its own domestic transaction fees?
  • Will American Express expand its small merchant program to compete with Visa's expanded threshold?

What would change this answer

American Express announces a specific change to its small business pricing structureThis would make the effect more certain, confirming that the competitive pressure is forcing a direct response.
Visa and Mastercard agree to further expand their lower small business rate thresholdsThis would likely reduce the competitive urgency for American Express, as the market would become more standardized in terms of low-cost options.

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  • About Discover

    How might Discover's current fee structure compare to the new V/M model, and how would that affect American Express's position?

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The full eventVisa and Mastercard adjust interchange rates and introduce new domestic fees Everything aboutAmerican Express

Brind's analysis is written by AI from the reporting linked above and can be wrong. This explainer is a possibility worth considering, not a forecast: steps marked as Brind's reasoning are not stated in the reporting. It is not investment advice; do your own research.