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Interchange fees paid by merchants to credit card companies when customers purchase with plastic have reportedly risen 400% in recent years. Merchants have organized, and are pressing Congress to do something about it.
As the New York Times’ blog, The Caucus, reported, last week the House and Senate held hearings on potential consumer credit card legislation. A group called the Merchants Payment Coalition (MPC) has targeted key House districts with an intensive media campaign to raise awareness about interchange fees.
Here is the ad they are running:
As any merchant who accepts credit cards unfortunately is aware, interchange fees are the widely varying and often changing fees paid by merchants in order to be able to accept payment with credit cards. They can have complex pricing structure depending on the type of card, the size of the merchant, type of goods or services sold, whether purchases happen in person, amongst other factors.
What merchants see lately, however, is simple: quadrupled interchange rates over the last several years and $42 billion paid last year, according to the Caucus.
These costs are ultimately passed on to the consumer. Ironically, as mentioned in the Caucus, large credit card companies and banks cite such consumers as the need for interchange fees. They claim the fees are necessary in order to open consumer accounts.
Public and Congressional ire has focused mainly on high interest rates, penalties and fees charged to consumers by credit card companies. More hidden fees, such as interchange fees, increasingly weigh down merchants and in the end their customers.
What do merchants want? The Merchants Payment Coalition wants the right to negotiate these fees with companies. Last year the Credit Card Fair Fee Act of 2008 would have allowed just that, but it failed to make it to the house floor. Many merchants hope this year will be different.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.