Interchange, the fee retailers pay for accepting credit cards, continues to make headlines. Here’s the latest:
From The Washington Post
Congress is considering three bills that would regulate interchange fees -- which generally amount to 1 to 2 percent of a total sale and totaled $48 billion in 2008. Meanwhile, the Government Accountability Office is doing a study of the fees, as required by a law signed by President Obama in May that bans many unfair credit card industry practices. Merchants across the country and the card industry are waging a fight for public support. The merchants say the fees are excessive and eat into their already small profit margins, forcing them to pass on the cost to consumers. The card issuers say they are providing merchants a much-needed service as more Americans choose to pay for their purchases with plastic.
From Time magazine
Americans are being forced to pay significantly higher swipe fees whenever they use their credit cards than any of their peers in the industrialized world, according to a report by the Merchants Payments Coalition. The report, released Thursday by a coalition of retailers, supermarkets, drugstores and other businesses, found that Americans currently pay about $2 in "interchange" fees for every $100 they spend using credit cards. The fee is actually paid by retailers, though consumers feel it in a higher retail price. This rate is twice that charged in the U.K. and New Zealand, four times the rate levied in Australia and more than six times the cross-border rate charged in the European Union, the study says.
From Visa Inc.
Consumers believe retailers benefit far more from accepting credit and debit cards than they pay in costs, according to a new survey released today by Visa Inc. The survey also finds that consumers believe merchants see card cost acceptance as a part of doing business, much like paying for utilities such as electricity. “Retailers want the best of both worlds - the benefits of card acceptance without paying the costs,” said Bill Sheedy, group president of the Americas for Visa Inc. “This research shows that retailers who are campaigning for checkout fees or uneven legislative schemes that shift the cost of doing business onto the backs of consumers are risking a customer backlash.”
To read more about how interchange and other processing fees impact garden retailers, check out the cover story of our July issue—Swiped!