H.R. 2695, The Credit Card Fair Fee Act, was reintroduced with slight differences from its 2008 version. The bill would grant limited antitrust immunity to Interchange rates negotiated between merchants and Visa Inc. and MasterCard Inc. with a representative of the U.S. Department of Justice attending the negotiations.
U.S. Rep. John Conyers Jr., the Democrat who chairs the House Judiciary Committee introduced the bill saying “It is not an attempt at regulating the industry and does not mandate any particular outcome; this legislation simply enhances competition by allowing merchants to negotiate with the dominant banks for the terms and rates of the fees.”
Right now small and mid sized businesses pay the same Interchange fees as larger chains. Having each merchant independently negotiate the interchange-setting process will not benefit small merchants who don't have the time, money or resources. As an advocate for small business, this is a concern.
Interchange fees are very complex now but at least the same fee is charged for a card issued from Bank of America as one issued from Chase. Just wait until the government gets involved and negotiations result in every bank having different fees. And just like the disadvantage likely faced by small merchants over giant retailers, so too will community banks be at a disadvantage over mega banks in these negotiations.
In the battle between mega banks and giant retailers over Interchange, let’s not forget the benefits of today’s level playing field where small businesses and community banks are not disadvantaged because of their size and ability to negotiate the most favorable terms.