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Fight Unfair Credit Card Fees

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"We've waited ten years already." Doug Kantor, Counsel to Merchants Payments Coalition on why we cannot allow for the big banks and credit card companies to delay reforms any longer. Every month of delay will cost Main Street merchants and consumers $1 billion.

 

 

Merchants Celebrate Facts of Swipe Fee Reform:

Tell Congress How Reform Benefits Consumers & Business

 

Washington, DC –Main Street business owners and advocates today welcomed their opportunity to expose the big banks and credit card companies’ false claims and to educate Congress with the real facts of swipe fee reforms—and the many ways in which reforms will benefit merchants and lead to more freedom, choices, and discounts for consumers.

“Lower merchant costs translate to lower customer prices, it’s as simple as that,” said Lyle Beckwith, Senior Vice President of Government Relations at the National Association of Convenience Stores. “Unlike the big Visa banks, which operate in a non-competitive environment where price-fixing is the norm, merchants base their business decisions on the price-competitive retail environment where price is king. If Store A doesn’t pass those savings on to its customers, you can bet that Store B will start offering discounts and gaining a huge market share in the process.”

While the big banks and credit card giants have been attempting to spin their message to look like the friends of consumers, real consumer advocates know the truth. That’s why consumer groups—not always friendly to business interests—strongly support swipe fee reform: they know it can’t help but lead to lower prices for consumers.

In their testimony to the House Financial Services Committee, US PIRG, Public Citizen and the Hispanic Institute wrote that “There is no evidence that swipe fee regulation will lead to an increase in consumer fees” and that “Reductions in swipe fees should result in substantially lower prices for all consumers.”   READ MORE

 

Fed to Release Rules on Debit Card Transactions
New York Times, December 17, 2010

Ads for cash cards at a Gate Petroleum gas station in Jacksonville, Fla. Now, retailers of all stripes can more easily set up incentive programs like the one Gate uses.

In most American stores, customers pay the same price for goods, whether they use credit, debit or dollar bills, even though it costs the merchant a different amount to accept each type of payment. That may soon change, the result of recent court settlements and legislation that have set out to reduce processing fees and abolish rules by the major card companies that have long made it impractical for merchants to give discounts to customers who use cheaper forms of payment, like cash. Read More.

 

 

Federal Reserve Proposed Rule - Background Information

Swipe fee reform around the world: consumers win

In case you missed it: Canada takes aim at Visa and MasterCard's anti-competitive rules

Interchange Amendment Senate Floor Statements

Debit Fee Cut Is a Rare Loss for Big Banks
New York Times, May 14, 2010

WASHINGTON — Retailers have begged Congress for years, in vain, to limit the fees they must pay to banks when customers swipe credit or debit cards. Bills never reached a vote. Amendments were left on the table. The Senate did not even grant the courtesy of a committee hearing. That long record of futility ended in a landslide Thursday night. Sixty-four senators, including 17 Republicans, agreed to impose price controls on debit transactions over the furious objections of the beleaguered banking industry. Read More.

Click here for: International Swipe Fee Report

Store owners fight for lower consumer prices: click here to view news story

The credit card interchange fee is the biggest credit card fee you've never heard of. Nearly $2 of every $100 American consumers spend using credit cards goes directly to the credit card industry through the interchange fee.

In 2008 alone, Americans paid over $48 billion in interchange fees, more than twice what was paid in credit card late fees and three times ATM fees. The average American household paid $427 in credit card interchange fees last year. Total interchange fee revenues have tripled since 2001.

But unlike credit card late fees or ATM fees, credit card interchange is set in secret - consumers don't know they're paying it through higher retail prices.
What's more, the same reckless, predatory lending practices that led to the sub-prime mortgage meltdown still prevail with credit cards. Fat interchange fees have created a perverse incentive for the big banks to abandon responsible lending practices in favor of maximizing fee income.

Because the big banks care more about consumers using their cards as opposed to paying them off, interchange has quickly become one of the root causes of billions in toxic credit card debt on the books of the big banks. The Wall Street Journal (Credit Cards Are the Next Credit Crunch: 3/10/09) has already identified credit card debt as the next big shoe to drop on the American taxpayer.

Protecting Americans from reckless big bank credit card lending depends on Congress reforming the interchange fee system. Congress can't fix the financial services industry without reforming huge, hidden credit card interchange fees.

MPC's Reponse to the Recent "Do Not Call List" Phone Calls