Visa Just Pulled the Plug on a $300K-a-Month Loophole

Visa’s new data rules are blindsiding businesses with massive fees. 👇

Visa’s overhaul of its commercial card-processing standards is triggering steep, unexpected cost increases for some merchants, forcing them to rethink how they handle transaction data or face sharply higher fees.

The shift stems from Visa’s Commercial Enhanced Data Program (CEDP), introduced on Oct. 17, which aims to curb the long-standing practice of retailers submitting fabricated invoice or purchase-order information to qualify for reduced interchange fees. The changes—and the artificial-intelligence tools Visa is using to enforce them—are reshaping the economics of credit-card acceptance for companies of all sizes.

“Everybody is concerned about those credit card processing fees. Nobody likes to pay them,” said Jeremy Layton, CEO and founder of Verisave, in an interview with AInvest. Many merchants, he said, previously sought lower fees by “plugging in fake data,” a tactic Visa explicitly targeted with the launch of CEDP.

Historically, Visa rewarded businesses that submitted detailed transaction data, such as item numbers or invoice references, because the additional information lowered the perceived fraud risk of each payment. But as automated systems made it easier for retailers to submit repeated or fabricated data fields, Visa responded by deploying new AI tools that analyze whether the information appears authentic. “If a company provides the exact same data time and time again, it’s likely it’s pretty fake,” Layton said. Visa, he added, has invested “billions of dollars” in such detection capabilities.

The new scrutiny has had swift financial consequences. According to Layton, one Verisave client paid over $300,000 more in processing fees in the second half of October alone because it could no longer rely on fabricated data to qualify for discounted rates. “It’s gonna be over $500,000 more in a full month of November,” he said. Verisave, Layton said, helps clients minimize those fees by adhering to legitimate reporting standards.

The stakes are especially high for retailers heading into the holiday season, when payment volume surges. Because higher spending means higher processing fees, businesses that have not adapted to the CEDP rules risk absorbing months of elevated costs. “If they wait until next year… it’s too late, right?” Layton warned.

Visa has insisted that its approach will help retailers negotiate better pricing, accelerate payables automation, and improve expense management. Layton points out that it can also help fight fraud. “You give me more data, it’s less likely that this is a fraudulent transaction, and we’ll reward you with a lower rate,” he explained, summarizing Visa’s rationale.

For merchants, the challenge is operational: qualifying for lower rates now requires integrating real transactional data from accounting or ERP systems directly into payment workflows. Verisave, which advises companies on reducing processing costs, helps businesses connect those systems so they can “pull that data forward and attach the real data to the credit card transaction,” Layton said.

Some payment processors, however, are already searching for loopholes. Layton said certain gateways are “randomizing” fabricated data to make it appear legitimate, a workaround that has temporarily passed Visa’s audits. But he cautioned merchants against relying on it: “AI is gonna catch on to this… my prediction is you give it a couple months, six months, I think they’ll start to flag that.”

Layton described CEDP as “the biggest change I’ve seen in 25 years in this business,” adding that other networks may follow Visa’s lead. For now, he urged businesses to move quickly. “If you’re a business that’s been impacted by CEDP, you have to change… or you’re going to be missing out on these opportunities for savings.”

Everything is more expensive and it's only going to get worse. 👇