SAVANNAH, Ga. – With transaction and interchange fees gobbling up more and more of a retailer’s profit margin, many convenience store owners are fighting back by asking their customers to support the financial reform bill currently in Congress, WSAV-TV reports.
Sen. Richard Durbin (D-IL) introduced an amendment to the reform bill that would limit swipe fees on debit cards. NACS is urging its members to send a letter to their senators and representatives and ask them to support Durbin’s amendment during conference negotiations of the reform bill.
NACS Vice Chairman of Research Greg Parker, owner of Parker’s convenience stores in Savannah, supports the amendment. He pointed out that his stores now pay a higher fee for debit card transactions than for processing credit cards but that the banks give no explanation for the difference. “There is no negotiation, they will not negotiate with us,” he said. “We don’t have the option of not taking MasterCard and Visa. It is a legal monopoly with no government scrutiny.”
Max Gleischman, a Durbin spokesman, said that MasterCard and Visa manage 80 percent of the network systems that handle electronic transactions. “We have seen over the last year that debit cards represent the fastest growing sector in the card industry,” said Gleischman. “And the rates for those cards are as unpredictable and as high as they are for standard credit cards.”
In 2008, an estimated $50 billion in interchange fees were paid, with around 80 percent of those funds funneled into 10 banks.
“Our entire industry made $4.8 billion last year and the credit card industry made $3.1 billion just by processing our transactions,” said Parker. “We’d like to know what the profits are that banks are generating for their credit card fees. We are looking for a little sunlight to be shined on the credit card and banking industry.”