Visa Revises Merchant Interchange Fee Policies

Visa has revamped its discount rates for credit card transactions, primarily through the Commercial Enhanced Data Program (CEDP) for business and commercial cards. The policy began rolling out in April 2025 and takes full effect on October 17, 2025. It requires merchants to provide highly accurate, invoice-quality transaction data to qualify for lower interchange rates.

Stricter Data Requirements

• Replaces older programs: CEDP replaces the Level 2 and Level 3 data programs, which were previously less strictly enforced. Previously, merchants could submit incomplete or placeholder data and still receive discounted rates.
• Emphasis on quality: Merchants must now provide real, verifiable data for the best discounts on B2B transactions. Required information can include:

• Specific line-item details
• SKU numbers and product codes
• Item quantity, unit cost, and tax information
• Shipping and freight amounts

Higher Fees for Non-Compliance

Merchants who fail to meet the new standards face higher interchange fees.

• Real-time enforcement: Starting October 17, 2025, Visa will use AI to monitor transactions and flag incomplete or inaccurate submissions.
• Verified vs. unverified status: Merchants are categorized as "verified" or "unverified" based on data quality. Unverified merchants face higher, more expensive interchange rates.
• Future rate increase: By April 17, 2026, Visa will eliminate most Level 2 programs, making CEDP the sole path to preferred rates.
• Potential impact: Thousands of merchants may see significant, potentially double-digit, fee increases.

Merchant Impact and Reaction

• Benefits for compliant businesses: Merchants providing accurate CEDP data can lock in lower interchange rates and reduce processing costs.
• Challenges for unprepared businesses: Small, mid-sized, and large businesses with outdated systems may struggle, leading to:

• Escalating costs: Higher fee tiers increase expenses directly.
• Operational hurdles: Implementing changes to capture and transmit detailed data can be complex and costly.
• Billing and accounting delays: Merchants not immediately verified may face delays in receiving discounted rates, affecting cash flow.

• Criticism over communication: Some consultants say Visa has not effectively communicated the changes, leaving many merchants unaware.

Required Data for CEDP

Merchants must provide detailed, accurate invoice-level information in three main categories:

1. Product and Line-Item Information

• Detailed descriptions: Example: "Model 457 Hydraulic Pump" instead of "item" or "service".
• Product codes/SKUs: Unique identifiers for each line item.
• Quantity: Number of units purchased.
• Unit of measure: Such as "each" or "box".
• Unit cost: Price per unit.

2. Financial Details

• Extended amounts: Total cost per line item (quantity × unit cost).
• Tax information: Itemized taxes, even if exempt (zero value required).
• Freight/shipping costs: Shipping or delivery charges.
• Discount amounts: Line-item discounts, if any.
• Total transaction amount: Must sum correctly to the final charge.

3. Business and Reference Information

• Purchase order (PO) numbers: Buyer’s PO number.
• Customer reference numbers: Unique identifier for the customer.
• Tax IDs: Identification numbers for merchant and supplier.

Importance of Data Quality

Visa’s AI-driven system validates data in real-time. Incomplete, inaccurate, or placeholder data flags the merchant as "non-verified," resulting in higher fees. Accurate, consistent submission is essential to maintain low interchange costs for commercial card transactions.