NEW YORK (Associated Press)
House lawmakers are moving to mandate that credit card companies negotiate the fees they charge merchants for electronic transactions, escalating an intense battle between the credit card industry and retailers.
A bill passed Wednesday by the House Judiciary Committee on a 19-16 vote is backed by retailers, who accuse Visa Inc. and MasterCard Inc. of levying excessive fees. Card company executives counter that the legislation would simply push more of the cost onto consumers. (Editor's Note: Agreed!)
The so-called interchange fee, which Visa says averages about 1.6 percent, differs depending on the merchant and type of card.
The fees are set by Visa and MasterCard but are collected by the merchant's bank as part of a larger charge for processing the transaction. The credit card companies say they don't receive revenue from the fees.
Retailers complain the fees are set collectively by the credit card companies and large banks and are presented to merchants as a "take it or leave it" offer. Visa- and MasterCard-branded cards account for 80 percent of the credit card market.
Steve Pfister, senior vice president for government relations at the National Retail Federation, called the bill "a sensible solution to an escalating problem that's costing consumers more every day."
But Josh Floum, Visa's general counsel, said in a prepared statement that the bill "would mandate unnecessary regulatory intervention into a fiercely competitive industry that is benefiting consumers, merchants and financial institutions."
Edward L. Yingling, chief executive of the American Bankers Association, agreed and said the bill "is simply an effort by the merchant community to have government step in to reduce their cost of doing business."
The Merchants Payments Coalition (MPC) issued the following statement in response to the House Judiciary Committee passing the Credit Card Fair Fee Act, H.R. 5546, today. The Committee voted 19 to 16 in favor of the Act.“We applaud the House Judiciary Committee’s leadership with the passage of the Credit Card Fair Fee Act of 2008, H.R. 5546. Today’s victory is a landmark decision that reaches far across party lines in reining in Visa and MasterCard’s stranglehold over merchants and consumers alike.
The Committee issued a loud, bipartisan wake-up call to credit card and financial services industry with the reporting of H.R. 5546, which they boasted would never see the light of day.
The Committee not only reported the bill with 10 Democrats and 9 Republicans voting to report it, but defeated every poison pill amendment by similar bipartisan margins." H.R. 5546 would end the anticompetitive practices of hidden credit card interchange fees, which cost Americans $42 billion last year.
We are encouraged by this momentum and effort by lawmakers to create transparency in the credit card marketplace and bring disclosure to everyone. We look forward to the Senate joining the House soon and to a strong floor vote on behalf of America's merchants and consumers.”
The Merchants Payments Coalition (MPC), UnfairCreditCardFees.com, is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees. For further information, please visit
http://www.unfaircreditcardfees.com
0 comments