For Immediate Release
Contact:  Rob Six, 703-741-7536, [email protected]

Merchants Comment on MasterCard Response to U.S. Merchant Interchange Lawsuit and Hidden Credit Card Fees

Washington, D.C. (May 17, 2006) -- The Merchants Payments Coalition (MPC) today offered perspective on MasterCard International’s response to the antitrust, class-action lawsuit filed by merchant groups on credit card interchange fees that merchants are required to pay to credit and other electronic card issuers when consumers use the cards to make purchases. 

MPC, which is not a litigant in the lawsuit, said that MasterCard has once again confused the central facts in the case with corporate “spin.”

“Credit card interchange fees are unreasonably and inexplicably high.  MasterCard is justifying the unjustifiable,” said Tim Hammonds, president and CEO, Food Marketing Institute (FMI).

"Merchants have never said that they do not recognize the value they receive from accepting payment cards, nor have they said they are unwilling to pay for the fair value of services they receive,” said Hammonds.  “What merchants are opposed to is the reality that credit card interchange fees far exceed the actual costs of providing these services – and moreover, that these fees are kept hidden from consumers because Visa and MasterCard forbid merchants from disclosing the fees they charge.”

The total U.S. interchange fees paid have doubled over the last ten years even though the technology used to process credit card transactions is more efficient and less expensive today.  Visa and MasterCard charge Americans among the highest credit card interchange fees in the world.  The fact that other merchants in countries around the world are charged substantially lower interchange than in the U.S. indicates that there is room to reduce these rates and still cover the cost of the actual transactions.

Hammonds added, “MasterCard has concocted its own series of myths and responses about interchange fees, but the myths and responses they’ve created in no way reflect the issues set forth in the complaints filed by merchants.  Rather than responding specifically to the merchant complaint, MasterCard has chosen to create confusion and keep Americans in the dark about the hidden fees they pay.”

The U.S. merchant lawsuit—representing thousands of merchants across the country—was initially filed in June 2005 and an amended consolidated complaint that added debit cards was filed in the Eastern District of New York on April 24, 2006. 

Interchange fees have emerged as a major public policy concern in the past year.  Earlier this month, New York Assemblyman Richard Brodsky introduced legislation to address hidden credit card fees, following closely on the heels of similar legislation introduced in Kentucky and Alabama.  This legislation is a positive step forward in exposing the truth about credit card fees that are kept hidden from consumers.  

The MPC, a coalition of some 20 trade associations representing retailers, restaurant, supermarkets, drug stores, convenience stores, gas stations, on-line merchants and other businesses that accept debit and credit cards, is fighting for more transparent interchange fees that give consumers information about the fees they pay.

Several members of the MPC are litigants in the lawsuit, including the National Association of Convenience Stores, the National Grocers Association, the National Restaurant Association, and the National Association of Travel Plazas and Truckstops.