Payment Processing Industry News (August 2023)

As always, our team here at Merchant Cost Consulting keeps a close eye on the payment processing world. From new interchange rates to technology updates and beyond, we strive to keep our readers informed with the most relevant payments information. 

Let’s dive deeper into the biggest news from the past month.

Mastercard Announces New Network Fees

Mastercard announced new fees effective for October 2023:

• Authorization Optimizer Insufficient Fund – $0.02
• Pre Authorization Card Present Fee – 0.0075% ($0.01 minimum)
• Pre Authorization Card Not Present Fee – 0.0125%

Read more about the latest Mastercard interchange rates here. 

Visa Announces New Digital Commerce Service Fee

Visa also announced a new network fee that goes into effect in October of this year. Visa’s new Digital Commerce Service fee is 0.0075% and applies to card not present transactions. There’s a $0.0075 minimum on all applicable transactions. 

Keep up with Visa’s newest network fees here. 

Stripe Updates Currency Conversion Refund Policy

Stripe announced changes to its currency conversion policy. Currently, Stripe refunds the currency conversion fee to merchants on foreign-currency transactions that were refunded.

But effective October 15, 2023, Stripe will no longer refund the currency conversion fee—even if the initial transaction is refunded to the customer. 

This applies to all transactions where a merchant accepts a payment in their non-primary currency, and Stripe automatically converts it to the merchant’s primary currency. 

Square Launches “Square Go” Booking App

On August 8, 2023, Square launched a new consumer booking app called Square Go.

Designed to work with Square Appointments, the app is supposed to help businesses get discovered by clients seeking their services. Eligible businesses using Square Appointments can set up a free profile on the Square Go app.

If the business has online bookings enabled, any bookings made through Square Go will automatically sync with Square Appointments. 

Check the latest Square fees here. 

Global Payments Rolls Out New Payment Facilitation Service

Global Payments added a “hybrid” payment service designed for ISVs.

The service is called ProFac and it’s built to help independent software vendors gain the benefits of payment facilitator without the hurdles associated with being a payments company. 

Global Payments has yet to release the number of ISVs currently using the service. 

Read more about Global Payments here. 

Visa and Conferma Pay Expand Commercial Payments

Visa and Conferma Pay announced a four-year partnership extension.

Initially launched in 2020, Visa Commercial Pay is built for virtual B2B payments. It includes three different B2B payment options:

• Visa Commercial Pay Mobile App
• Visa Commercial Pay Travel
• Visa Commercial Pay B2B

During the partnership expansion, Visa and Conferma Pay plan to invest in more B2B payment products and expand to Asia, Latin America, and Middle East markets. 

Shopify Releases Summer 2023 Editions

Twice annually, Shopify releases a breakdown of its product updates and new features—Shopify Editions. 

Noteworthy highlights of the latest editions include:

• Shopify Sidekick (AI-enabled assistant) is released for early access
• Shopify Credit, a no-fee business credit card, is available for eligible merchants with 3% cash back on top spend category and 1% cash back on other purchases
• Shopify Magic (AI-powered tool) releases new capabilities
• Shopify Payments extends to support previously restricted industries (like tobacco, CBD, and more)
• New features for B2B sellers
• New APIs and developer tools
• New Shopify POS updates

You can check out all of the latest Shopify Editions here.

Payment Companies Report Q2 2023 Results

Several major payment companies released their Q2 results in August, including Global Payments, FIS and Worldpay, and Block. 

Here’s a closer look at some highlights and key takeaways from these reports. 

Global Payments Q2 Results

• Net revenue increased 7% (compared to 5% in Q1)
• Revenue from merchant solutions up 9%
• Revenue from issuer solutions up 6%
• Next-gen POS device to launch later in 2023
• Completed first full quarter integration with EVO Payments
• State Farm arena is live with Xenial

Read the full release here. 

FIS and Worldpay Q2 Results

• Revenue increased 4% (compared to 3% in Q1)
• Organic banking revenue up 2%
• Merchant revenues up 1%
• Global volume increased 6% (compared to 9% in Q1)
• Sale of 55% of Worldpay to GTCR expected to be completed by Q1 2024
• Worldpay will continue to be a partner and distributor of FIS products

Read the full release here. 

Block Q2 Results

• Total revenue up 25% (excluding Bitcoin)
• Square revenue up 11%
• Cash App revenue up 39% (excluding Bitcoin)
• Verse (Cash App’s EU brand) shut down
• ClearPay BNPL is being shut down in Italy, Spain, and France
• Fiscal year adjusted EBITDA adjusted to $1.5 billion from $1.36 billion

Read the full release here. 

Toast Launches New Catering and Events Platform

Last month, we discussed Toast’s addition and then swift removal of its $0.99 customer ordering fee. Toast is in the headlines again this month with its new Catering and Events platform.

This new product is fully integrated with Toast’s POS system, and it’s designed to support custom banquet orders and fulfillment. 

See the latest Toast fees here. 

PayPal Launches US Dollar-Denominated Stablecoin

In an August 7th press release, PayPal announced its official launch of a new stablecoin that’s fully backed by US dollar deposits, short-term US treasuries, and other cash equivalents. 

The stablecoin, PayPal USD (PYUSD), is redeemable at a 1:1 value with US dollars and issued by Paxos Trust Company.

Eligible PayPal users in the US can use PYUSD to:

• Transfer funds between PayPal and external wallets
• Send P2P payments
• Make purchases at supported checkouts
• Convert to supported cryptocurrencies

Adyen Reports 1H23 Financial Results

Adyen reported first half results from 2023. Noteworthy highlights of the report include:

• Payments processed growth up 23%
• Net revenue up 21%
• North America revenue up 23%
• EBITDA down -10%
• 551 new hires in 1H23
• Total full-time employee count is now 3,883

You can check out the full results here. 

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