Visa’s updated approach to calculating interchange fees on credit card transactions is creating unexpected financial pressure for many merchants. The changes stem from the launch of the Commercial Enhanced Data Program (CEDP), which took effect in October and has already reshaped how transaction data is evaluated.
While Visa, card issuers, and payment processors had been preparing internally for months, industry consultants say a large portion of merchants were unready for the shift. As a result, many businesses have lost access to preferred interchange rates and are now paying noticeably higher fees.
Businesses Struggle to Meet New Data Standards
Jeremy Layton, CEO of Verisave, a consultancy that audits card-processing costs for retailers, restaurants, and enterprise-level merchants, says the impact has been widespread. According to Layton, most of his clients are now facing higher Visa fees because their systems are not yet supplying the data required under the new framework.
Even companies processing billions of dollars annually have failed to meet the updated criteria, he said, leading to automatic reclassification into less favorable interchange tiers.
“Some very large merchants are realizing they missed the mark,” Layton said. “Right now, many of them are in full damage-control mode.”
Tighter Rules, Fewer Discounts
Under the CEDP rules introduced on Oct. 17, Visa now requires significantly more detailed transaction information. Visa and its partners argue that enhanced data is critical as fraud prevention becomes more data-driven and increasingly important to issuing banks and payment networks.
Historically, Visa applied three interchange levels. Level three offered the deepest discounts but required the most detailed data. Level two provided moderate savings with fewer data requirements, while level one served as the default base rate.
For years, many merchants were able to qualify for level three pricing despite submitting incomplete or placeholder data. The new program is designed to eliminate that practice. In addition, the level two discount tier is scheduled to be phased out entirely next April.
“As things stand now, achieving the top interchange tier has become much harder,” Layton said.
Communication Breakdown
Layton places much of the blame on Visa’s rollout strategy, arguing that merchants and advisors received insufficient guidance ahead of the change. He described the card network as largely unresponsive to questions in the months leading up to the launch, leaving firms to interpret the rules on their own.
Despite his criticism, Layton acknowledged that better data standards could reduce fraud and address long-standing concerns from card issuers, who have lost revenue when discounted rates were applied to transactions supported by inaccurate data.
Visa did not respond to requests for comment.
Incentives — and Intensified Monitoring
To encourage compliance, Visa is offering the possibility of even lower level-three rates for merchants that fully satisfy the new data requirements. However, consultants warn that enforcement will be strict.
Visa is relying heavily on advanced analytics and artificial intelligence to evaluate transaction data and ensure adherence to the program.
“Visa has spent billions on AI-driven technology, and they’re clearly committed to this,” Layton said. “When major merchants are already losing hundreds of thousands of dollars, it shows the network isn’t backing down.”
Industry Concerns Continue
Other advisors working with merchants are also preparing for continued disruption. Dustin Magaziner, CEO of PayBright, said it is still too early to measure the full impact of CEDP, as many businesses are only now receiving their first complete monthly statements reflecting the changes.
He added that confusion is particularly acute at the processor level, where enrollment and enablement processes remain unclear.
“With CEDP, eligibility depends on proper enrollment, and there’s widespread uncertainty across the ecosystem about how to activate it correctly and track which merchants are actually covered,” Magaziner said.
Higher Fees First, Corrections Later
Another challenge is how disputes are handled. If transactions are misclassified, merchants may be forced to absorb higher interchange costs until adjustments or rebates are issued.
Dean Leavitt, CEO of Boost Payment Solutions, said the current setup effectively assumes noncompliance until merchants prove otherwise. Many suppliers have not yet been formally verified under CEDP, and some transaction data continues to fall short of Visa’s new standards.
According to Leavitt, some businesses may see fees rise by as much as 100 basis points above expectations, potentially triggering alarm once statements are reviewed.
Questionable Data Practices Persist
Consultants also point to an uneven enforcement landscape. Despite the stricter rules, some acquirers and payment gateways appear to be continuing questionable data-submission practices without immediate consequences.
“What’s most surprising is that certain processors are still pushing poor-quality or placeholder data through the system,” Layton said. “That behavior risks undermining the credibility of the entire program.”
Magaziner echoed that assessment, noting that he has observed similar patterns. Both declined to name specific firms.