Visa to Help Ease Pain at the Pump

Visa Inc. (NYSE:V) today announced that it is implementing processing and rate changes that will result in benefits for American consumers and fuel merchants frustrated by rising prices at the pump. Visas new processing approach for fuel transactions will enable consumers to buy gas more easily and allow motorists and station owners to better avoid the risks and inconveniences associated with pump limits and holds on funds. Visa also will reduce interchange rates for fuel transactions, which can lower costs for oil companies and service stations and can be passed onto consumers at the pump.

While Visa cannot lower the price of crude oil, there are things we can do to help make the process of buying gas easier for our cardholders. And by lowering our rates, we hope to see oil companies pass these savings along to their stations and ultimately to consumers, said Bill Sheedy, global head of corporate strategy and business development for Visa Inc. As oil prices rapidly rise to unprecedented levels, we are accelerating our ongoing efforts to address the issues in the fuel segment.

The new programs come amid a nearly 100 percent jump in the price of crude oil in the past year, which has driven gas prices in the U.S. from an average of $2.98 a gallon in June 2007 to $4.07 in June 20081. In this extraordinary environment, Visas combination of fuel-payment changes can provide consumers with increased purchasing power at the pump and offer fuel merchants opportunities to improve their business operations.

Visa is restructuring consumer interchange for transactions at automated fuel dispensers and service stations in the United States, effectively lowering interchange rates. Interchange for Visa consumer debit cards (Visa Check Card and Visa prepaid) will be capped at $0.95 per transaction. This change will become effective July 18, 2008. Visa credit interchange applied to fuel transactions has been restructured into a single, lower rate across all consumer credit card transactions. This adjustment will take effect system-wide for all fuel transactions in October 2008. In the meantime, Visa is willing to work with fuel merchants and their acquirers individually to process credit transactions at these lower rates, ahead of October.

Even though Visas interchange rates on fuel transactions are already among the lowest in our system, the run-up in fuel prices to todays unprecedented levels requires an exceptional response, said Sheedy.

As an example, under the new rates, if a motorist uses a Visa Signature credit card to fill a 15-gallon tank at $4 a gallon or $60 total the acquiring institution generally would pay $0.94 in interchange fees, a savings of 14 percent over current rates. Using a debit card, that same transaction could be cleared within hours, quickly removing the $60 hold that is often placed on a consumers funds for one or two days in the current system. For higher transaction amounts, these interchange adjustments have an even greater impact. For a $120 consumer transaction, the level of interchange for the same Visa Signature transaction would be $1.63, for a 43 percent savings. With the cap on Visa Check Card interchange, an acquirer would see a reduction of 59 percent on fuel transactions.

People are frustrated enough with the price of gas today; they shouldnt be frustrated with the payment process as well, said Sheedy. We took an entirely new approach to processing fuel payments, and created a solution that removes many of the major barriers that consumers and station owners face today at the pump.

This fall, Visa will implement Real-Time Clearing, which represents a fundamental change and significant improvement in how fuel transactions are processed. With Real-Time Clearing, transactions will be processed immediately instead of at the end of the day. This can significantly reduce the hold times that financial institutions place on cardholders accounts. Gas stations will send a final transaction amount within hours if not minutes of a cardholders purchase. Current fuel-payment processing can take up to two days or more.

Real-Time Clearing also provides merchants and acquirers with more control over their acceptance processes, allowing them to make better authorization decisions. This can help drive increased sales for stations because it reduces the number of consumers that encounter a shut-off before their tanks are full. Consumers benefit by being able to pump more gas in a single transaction before hitting authorization limits. Real-Time Clearing can also qualify a stations transactions for better interchange rates at higher ticket amounts, which can lower station owners costs.

Until the new processing changes are implemented in Visas October systems upgrade, Visa is allowing consumer fuel transactions up to $125 to qualify for its best-available interchange rates. This interim step is effective July 18, 2008 and will remain in place through October 2009. Once gas stations and their financial institutions migrate to Real-Time Clearing, consumer fuel transactions up to $500 can qualify for Visas best available interchange rates.

About Visa

Visa operates the world's largest retail electronic payments network providing processing services and payment product platforms. This includes consumer credit, debit, prepaid and commercial payments, which are offered under the Visa, Visa Electron, Interlink and PLUS brands. Visa enjoys unsurpassed acceptance around the world and Visa/PLUS is one of the world's largest global ATM networks, offering cash access in local currency in more than 170 countries. For more information, visit

1 U.S. Energy Information Administration (


Visa Inc.
Ted Carr, +1-415-932-2370

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