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Payments Regulation in Asia
POS terminals compatible with cashless payments and to mitigate the initial investment for merchants, particularly small businesses.
While costs are going down on average, similar market dynamics endured, such as small merchants burdening higher costs and negotiation driving lower costs. Negotiated vs. non-negotiated differentials persisted, with negotiated fees sitting at an average 2.51% and non-negotiated fees sitting at 2.89%, a 38 basis point differential. Similarly, the smallest merchants paid an average MDR of 3.58%, more than double the largest merchants and nearly one third higher than the market average (Figure 22). 159
Figure 22. Average MDR by Merchant Annual Sales (2019 vs. 2022)
Since the 2022 report’s publication, JFTC and METI have continued to take on additional initiatives to improve the cost of payments for merchants. The JFTC found that there could be more adequate steps taken to promote fee negotiations between merchants and acquirers and competition among acquirers and networks.
The JFTC splits the networks in the following categories:
• Category 1: International networks that are not responsible for card issuance and managing member stores, i.e., Visa, UnionPay, Mastercard. • Category 2: International networks that are responsible for card issuance, i.e., American Express, JCB, and Diners. • House Card: Cards without international branding
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Ibid
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