The Merchant Interchange Debate Continues

This week the National Retail Federation and the Merchants Payments Coalition released a 14-page report, entitled, “’Swipe Fee’ Reform--International Lessons” lobbying in favor of regulating Interchange. Focusing on what other countries are doing around the world and arguing that Interchange fees are ultimately borne by consumers, the MPC’s report can be found at: www.unfaircreditcardfees.com.

On the same day, as reported in Reuters, The Electronic Payments Coalition issued the following statement: Today, the Electronic Payments Coalition released key evidence from several sources, demonstrating conclusively that consumers would be hurt by interchange regulation in the form of higher fees, fewer benefits, and zero savings at the cash register. Despite the misleading claims of giant retailers who want to shift this cost, merchants themselves have confirmed that they would not pass savings on to their customers.  Representatives of the U.S. government, international economic experts, the Reserve Bank of Australia, and merchants themselves have acknowledged that consumers would see no savings from any interchange regulation.

Visa Inc. also released a new survey that showed customers by a 2-to-1 margin indicated they believed retailers should pay the cost of accepting credit and debit cards.  The nationally representative telephone survey of 1,000 adult consumers also found:

  • 78 percent of consumers believe the value and benefits retailers receive from accepting credit and debit cards outweigh the costs of accepting them.
  • 83 percent of those surveyed believe that any savings retailers realize will be used to increase their own bottom lines and will not be passed on to consumers.
  • 91 percent of consumers say they are more likely to shop at stores that accept credit and debit cards.

Both sides of the debate are trying to influence lawmakers where two House bills and one Senate bill have been introduced.

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