MasterCard and Visa slamming processors with fines

It's not been reported very widely, but it seems that MasterCard International and Visa US are busy imposing fines on transaction processors who are failing to meet their stringent security requirements.

According to US newswire reports, MasterCard has imposed fines on merchants that haven't met its requirements to keep transactions secure, and starting Saturday, Visa will take aim at the nation's largest merchants with fines that start at $10,000 a month and can rise to $100,000 a month.

The Wall Street Journal, meanwhile, says that the card organisations are hitting the transaction processors, who in turn, pass the fines on to the merchants themselves.

Neither Visa nor MasterCard is saying who's being fined, but the WSJ says that it is hitting those merchants processing in excess of six million transactions a year.

The paper says that Visa counts 334 merchants in this category; And, as of last Friday, 20 of them are said to be in violation and could face fines if they don't comply by the end of the month!

Over at MasterCard, whilst the association has been issuing fines for more than a year, several transaction processors are saying that the fines seem to have accelerated recently and that several penalties have been handed down this month.

The WSJ says that the fines have ranged between $5,000 and $15,000. This is interesting. Clearly online fraud is hitting the card companies where it hurts, namely on their bottom line.

And since they can't recoup the costs directly from cardholders, they're clearly reaching out in the other direction, the merchants.

Who, of course, will end up increasing their prices.

Nice one... not...