Washington Report: Swipe Fee Reform Overdue Says Reagan Economist

Also, two senators as the Fed for a meaningful exemption from swipe fee rules for small banks and the House is planning to consider 1099 repeal.

via Washington Report: Swipe Fee Reform Overdue Says Reagan Economist.

AmEx sees up to $500 million more in legal losses

American Express Co said it could face up to an additional $500 million in losses from lawsuits and governmental examinations, on top of what it has already reserved for them.

via AmEx sees up to $500 million more in legal losses.

Banks’ swipe snipe: Limit debit-card purchases – NYPOST.com #SwipeFees

Around 520 million people have debit cards in the US, while 440 million have credit cards, according to the latest available data from MasterCard and Visa.

via Banks’ swipe snipe: Limit debit-card purchases – NYPOST.com.

Banks Might Limit Amount You Can Buy On Debit Card – The Consumerist

Grumbling over proposed limits to debit card swipe fees, banks are hinting they’re considering putting a cap on how much you can buy with a debit card. It could even be something like $50 or $100, forcing consumers to either pay with credit card or cash

via Banks Might Limit Amount You Can Buy On Debit Card – The Consumerist.

Banks hungry for revenue target free checking accounts | ScrippsNews

Let’s be honest. You probably won’t be shedding many tears when you hear that retail banking revenues have been under siege by regulators

via Banks hungry for revenue target free checking accounts | ScrippsNews.

Don’t let banks, credit cards bully businesses – LeaderHerald.com | The Leader Herald #SwipeFees

We can’t let the special interest banks and credit card companies bully the Main Street businesses back into submission, and we can’t let Congress cave so quickly on this needed reform. Retailers are fighting back and we urge our customers to do the same.

via Don’t let banks, credit cards bully businesses – LeaderHerald.com | News, Sports, Jobs, Community – The Leader Herald.

Retailer Suing Visa and MasterCard Wants Exact Merchant Interchange Fee Printed on Each Credit and Debit Card Receipt

If Visa Inc. and MasterCard Worldwide would post the exact merchant interchange fees on every credit card receipt it would accelerate attention to the $62 billion annual hidden tax on consumers and retailers. This relief is being championed by the editor of WayTooHigh.com — The Credit Card Interchange Report, Mitch Goldstone.

According to WayTooHigh.com, Visa USA Inc. is posting a matrix of perplexing rate schedules and scores of fees on its website; MasterCard also has a similar fee schedule that is more than one hundred pages.

“A more straightforward pricing model to easily obtain fee schedules is in place at most other businesses,” explained Mitch Goldstone, WayTooHigh.com editor and a lead plaintiffs in the antitrust litigation against the two leading credit card associations and its member banks.

As an example, Goldstone, who is president and CEO of California-based ScanMyPhotos.com, said “when consumers order concert tickets from Ticketmaster, the receipt includes the exact ‘convenience charge,’ ‘delivery’ and ‘order processing fees.’ When packages are sent via Federal Express, a detailed price quote pops up on the online ordering page to provide the exact ‘fuel surcharge’ and other fees. If Federal Express’ rates are too high, consumers can choose another carrier. But, with an 80% market monopoly, retailers are forced to accept the two leading payment card brands.”

“While not endorsing a particular solution, it would be more helpful for consumers if there were unambiguous and transparent interchange fees for each transaction — right on the charge receipt,” said Goldstone

“Disclosing the exact interchange fee on every credit card receipt will help consumers and retailers better understand the real extent of these charges,” commented Goldstone who explained that “average credit card interchange fee in the U.S. is about 1.7% of the total charge.”

Just as sales tax is included on receipts, Goldstone believes that more transparency for the merchant interchange tax would lead to more competition among card networks. By doing so, he said “the volume of consumer and retailer outrage will be amplified.

Follow WayTooHigh.com on Twitter

Overview: Merchant Interchange Antitrust Litigation Issues Six Years and Counting… #SwipeFees

Millions of retailers have been damaged by Visa and MasterCard and the profound impact from billions of dollars each year being charged as a hidden tax on consumers and retailers. Over the years, many, including ScanMyPhotos.com have been so angered by the banks anticompetitive, price fixing by agreement that they wanted to respond and act.

Overview: America’s largest banks are accused of unlawfully fixing the merchant credit card fees from transactions over the Visa and Mastercard networks. They also allegedly enact restrictions that prevent merchants from protecting themselves against those fees. In this complaint, two nationwide classes of merchants seek monetary damages to compensate them for the overcharges caused by this llegal conspiracy and equitable relief to protect themselves against continuing and future harm.

April 25, 2006 – First Consolidated Amendment – Class Action Complaint. “PAYMENT CARD INTERCHANGE FEE AND MERCHANT-DISCOUNT ANTITRUST LITIGATION”

Among the charges are that Visa and MasterCard’s Board of Directors are alleged to have fixed, raised and conspired to set Interchange fees in violation of Section 1 of the Sherman Act. It is unlawful to fix prices. It is also illegal to restrain trade. Visa and MasterCard are being accused of protecting their monopoly by ensuring that no competitor gains significant market power. The amended class action complaint was filed today in the U.S. District Court Eastern District of New York.

Key points of distinction, as identified within the amended complaint. Did you know that:

1) Visa and MasterCard do not use the Interchange Fees to fund their operations.

2) Visa and MasterCard’s Member Banks charge an Interchange Fee to merchants, even when the issuing and acquiring banks are the same entity.

3) Interchange Fees helped pay for the costs of initial card issuance, marketing, transferring transactional paper between the acquiring and issuing banks. This was necessary to induce banks to issue and support the card networks. The networks no longer transfer large numbers of paper receipts (remember the manual credit card imprinters, and multi-layered carbon-copy forms?). Thus, Interchange fees are no longer cost-based.

4) Merchants have no choice but to accept Visa and MasterCard’s dominant credit cards and their forced, supracompetitive level of Interchange fees. Nearly every merchant that accepts Visa payment cards also accepts MasterCard as a form of payment; there is little distinction between the two. A Visa transaction is indistinguishable from a MasterCard transaction. Both share identical relationships among the same Member Banks.

5) Today’s credit card network could function effectively without uniform, collectively fixed Interchange fees.

6) Every major U.S. bank is a member of both Visa and MasterCard’s associations and the memberships are virtually identical.

7) The collective setting of uniform Interchange fees restrains competition and elevates the merchant discount fees to supracompetitive levels. Visa and MasterCard and the defendant banks are direct horizontal competitors of each other, engage in unlawful contracts, conspiracies and practice unreasonable restraint of interstate trade or commerce in violation of the Sherman Antitrust Act. And, all the Member Banks of Visa and MasterCard have actual knowledge of, and have knowingly participated in the conspiracy.

Visa and MasterCard use their market power by “price discrimination” in the level of Interchange fees charged to various merchants. They also force their premium credit cards (signature cards) upon merchants to accept and charge higher Interchange fees than non-premium cards. Merchants are thus subsidizing cardholders frequent flyer and other reward points.

9) There are significant barriers to entry for other card brands to enter the market. Because of these barriers, the only successful market entrant since the 1960′s was Discover and today it would cost over $1 billion to enter the market, but still face problems with developing a separate merchant acceptance network.

Startup @Square Squares Off Against Rivals By Dropping #SwipeFees

The change means that merchants using Square for credit card payments will pay only one 2.75% fee for charges, rather than both a percentage fee and an additional fixed cost. They also hope the move will provide greater transparency in an industry that can often have labyrinthine pricing structures.

via Startup Square Squares Off Against Rivals By Dropping Fee.

Summary of MASTERCARD INC – Yahoo! Finance

In addition, our business and our customers’ businesses are subject to regulation in many countries. Regulatory bodies may seek to impose rules and price controls on certain aspects of our business and the payments industry.

via Summary of MASTERCARD INC – Yahoo! Finance.

Banks, retailers square off over debit card #swipefees – San Antonio Express-News

Those interchange, or “swipe,” fees average about 44 cents per transaction, according to the Federal Reserve. Those fees add up to billions for financial institutions

via Banks, retailers square off over debit card fees – San Antonio Express-News.

Merchants Doubt Lawmakers Will Derail New Debit-Interchange Rules – US Banker

“It would be extraordinary for Congress to reverse something it passed overwhelmingly not many months ago, which nearly two-thirds of lawmakers voted for,” Mallory Duncan, senior vice president and general counsel for the National Retail Federation, tells PaymentsSource, referring to the so-called Durbin Amendment within the Dodd-Frank Act that Congress passed last year.

via Merchants Doubt Lawmakers Will Derail New Debit-Interchange Rules – US Banker.

Bank of America writedown wipes out entire industry’s 2009 profit | San Francisco Business Times

Bank of America wiped out the entire banking industry’s profits in 2009 with its decision to almost double a goodwill charge at the company’s card unit, the FDIC said Wednesday.

via Bank of America writedown wipes out entire industry’s 2009 profit | San Francisco Business Times.

2nd Alternative Payment Systems Innovations Summit – pymnts.com

2nd Alternative Payment Systems Innovations Summit

via 2nd Alternative Payment Systems Innovations Summit – pymnts.com.

US consumer group says debit-fee caps need tweak

Banks and retailers this week waged a furious war of words over Federal Reserve proposals on so-called “interchange” fees, which merchants pay banks and credit-card networks every time a customer buys something with a debit card.

via US consumer group says debit-fee caps need tweak.

Retailers Say Federal Reserve Proposal to Lower Debit Card #SwipeFees Doesn’t Go Far Enough

Retailers Say Federal Reserve Proposal to Lower Debit Card Swipe Fees Doesn’t Go Far Enough 

Washington, February 23, 2011 – The National Retail Federation told the Federal Reserve this week that a proposal to cap debit card swipe fees at 12 cents per transaction does not go far enough, and that banks should honor debit transactions at or close to face value, the same as checks. 

“History has shown that by adopting at-par presentment for checks, Congress and the Board got it right,” NRF said in comments filed with the Federal Reserve Board of Governors on Tuesday. “A century later, Congress has provided the Board with the opportunity to get it right again by renewing the principles embedded in the Board’s at-par checking rules. When every party bears its own costs, the free market will force all parties to strive to minimize their costs and every party will have the potential to win.” 

Under swipe fee reform included in last year’s Dodd-Frank Wall Street Reform and Consumer Protection Act, the Fed was instructed to establish regulations that would result in “reasonable” debit card fees proportional to banks’ cost of processing debit transactions. Debit swipe fees are currently one to two percent of each transaction but the Fed proposed in December that they be capped at a flat fee of no more than 12 cents per transaction. Financial institutions with less than $10 billion in assets would be exempt. The Fed is currently reviewing comments on the proposed rules, with an April deadline to approve a final version so the reforms can take effect in July. 

NRF said the proposal’s “only shortcoming is its failure to carry the principles through to the extent necessary to achieve true market correction in a realm long lacking transparency and competition.” NRF noted that banks in their own filings with the Fed have claimed only 4 cents as their cost of processing a debit transaction, and that a study by the respected financial research firm First Annapolis Consulting estimates the cost at one-third of 1 cent for PIN debit and 1.36 cents for signature transactions. 

NRF said it “strongly urges” the Fed to further reduce the cap “toward a level that more accurately reflects the actual costs.” NRF argued that debit cards are merely plastic checks that draw on the same bank accounts as paper checks and therefore should be treated the similarly. The Fed has required paper checks to be cashed at face value since being directed by Congress to do so in 1916, reasoning that if each party involved with a check had to absorb its own expenses they would have an incentive to reduce the cost, and merchants, customers and banks would all benefit. 

The introduction of debit cards a generation ago dramatically lowered banks costs of giving customers access to their checking accounts, and some banks even paid retailers as much as 5 cents per transaction to accept the cards. But instead of continuing such practices, the banking industry has turned debit cards into a profit center, charging fees that “have increased the price of everything our customers buy and dampened merchants’ profitability as well.” 

Debit card swipe fees currently total about $20 billion a year, and card company practices compel merchants to pass these fees along to customers through higher prices. The Fed estimates that its proposed cap would save merchants and their customers about 70 percent, or about $1.2 billion a month. 

The Fed’s proposal also offers two alternatives intended to give merchants a choice of at least two unaffiliated, competing card processing networks to use when swiping a card. The first option would require that one PIN network and one signature network be available while the other requires that two of each type be available. NRF said it “strongly supports” the second option to ensure that true competition to give merchants the lowest costs will exist.

NRF’s National Council of Chain Restaurants division filed separate comments raising concern that the 12-cent cap is too high because it is a greater percentage of the small-ticket transactions often conducted by restaurants than it would be on the larger sales typically made by general merchandise retailers. Like NRF, NCCR called on the Fed to lower the 12-cent cap to a figure more in line with banks’ actual “reasonable and proportional” costs.  

As the world’s largest retail trade association and the voice of retail worldwide, NRF’s global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.4 trillion. www.nrf.com

via NRF Press Release

US consumer group says debit-fee caps need tweak

* Consumer Federation of America an unlikely ally of banks

* Federal Reserve proposed cutting debit-fees cap 75 pct

* CFA concerned over impact on poorest bank customers

By Maria Aspan and Dave Clarke

via US consumer group says debit-fee caps need tweak.

About CFA – The Consumer Federation of America

The Consumer Federation of America (CFA) is an association of non-profit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization’s Board of Directors.

via About CFA.

Why Preparing in Advance is Priceless: How MasterCard CEO Ajay Banga Planned Ahead for His New Leadership Role – George Bradt – The New Leader’s Playbook – Forbes

Ajay’s transition from Citibank to MasterCard began even before the official announcement in June 2009 that he would join the company that summer.

via Why Preparing in Advance is Priceless: How MasterCard CEO Ajay Banga Planned Ahead for His New Leadership Role – George Bradt – The New Leader’s Playbook – Forbes.

Visa and Mastercard Rise as Fee Fears Abate | InvestorPlace

Visa (NYSE: V) and MasterCard (NYSE: MA) remain in a state of regulatory limbo regarding the Durbin amendment to the Dodd-Frank Wall Street reform bill

via Visa and Mastercard Rise as Fee Fears Abate | InvestorPlace.

Surcharges illegal: credit card providers – Emirates24|7

MasterCard also said surcharging is prohibited.

“Unless local regulation permits it, MasterCard has rules that prohibit surcharging in order to ensure that consumers can choose their preferred form of payment, and not be penalized for choosing to use their MasterCard card” Eyad Al Kourdi, Vice President and Country Manager, UAE, MasterCard Worldwide, told Emirates 24|7.

via Surcharges illegal: credit card providers – Emirates24|7.

Consumers caught in middle of debit card #swipefees fight | Houston Chronicle

“Merchants are subject to severe penalties if they decline to accept a network’s card on the basis of the card’s issuer,” Durbin said in a statement.

via Consumers caught in middle of debit card fee fight | Business | Chron.com – Houston Chronicle.

NACS Submits Comments on Debit Card Interchange #SwipeFees

WASHINGTON – Yesterday, NACS sent comments to Jennifer J. Johnson, secretary of the Board of Governors of the Federal Reserve System, about debit card interchange fees and routing. NACS also supports the letter sent by the Merchants Payments Coalition.

NACS highlighted that payment card cost, with interchange as the largest component, “represents the single largest operating expense in our industry behind payroll expense, and is forecast to have cost the industry $8.9 billion in 2010. Of all card payment types, signature debit card products are the single fastest growing tender type within our industry and now comprise more than 50 percent of the industry’s Visa and MasterCard interchange expense.”

The association goes on to talk about what will impact the convenience and fuels industry the most. “With respect to debit interchange transaction fees, NACS unreservedly believes Alternative 1 to be the best combination of reduced regulatory burden, clarity and increased efficiency. While NACS believes the proposed safe harbor is overly generous given the Federal Reserve’s own data and other countries’ debit systems (many of which operate without interchange), this option represents real progress toward an improved system. The safe harbor and cap should apply to every transaction. For example, no issuer should be able to exceed the cap on any transaction even if the issuer keeps average fees below the cap.

“With respect to fraud and fraud mitigation costs, NACS supports comments submitted by the Merchants Payments Coalition advocating for a performance standard for determining qualified fraud prevention expenses. The baseline for such a standard should be the fraud levels experienced on PIN debit transactions, which are far lower than those for signature debit.

“With respect to debit card restrictions, NACS unreservedly recommends the adoption of Alternative B by the Board as the only suitable solution to establishing competition between card networks on every transaction. Alternative A would have limited effect; it would not create competition for the majority of transactions and it would not satisfy the language or intent of the Durbin Amendment. Further, the minimal cost and technical requirements of implementing Alternative B should be recognized and an accelerated implementation deadline should be adopted.”

NACS would like to thank the more than 200 convenience store operators who listened to our calls to action and sent letters to the Fed in support of the Durbin Amendment. To keep the momentum strong, NACS needs you to continue sending letters to your members of Congress.

Source: NACS Press Release

Fed disputes TCFs claims on card fees | StarTribune.com

Fed governors are seeking to have TCFs lawsuit dismissed. In court documents filed Friday, they argued that TCFs claims of irreparable harm from the proposed fee cap are “highly speculative,” and do not compare to the harm that retailers and consumers would face if the current debit-card fees remained in place.

via Fed disputes TCFs claims on card fees | StarTribune.com.

New credit card laws hailed as good for consumers – KTNV ABC,Channel 13,Las Vegas,Nevada,News,Weather,Sports,Entertainment,KTNV.com,Action News .:.

The White House says last year’s new credit card laws were good for consumers. The laws curbed interest rates and forced more disclosure from credit card companies on potential fees.

via New credit card laws hailed as good for consumers – KTNV ABC,Channel 13,Las Vegas,Nevada,News,Weather,Sports,Entertainment,KTNV.com,Action News .:..

Henry Helgeson, CEO of Merchant Warehouse is wrong on electronic payment interchange #swipefees

CardLine’s PaymentSource quoted Henry Helgeson, CEO of a processing company called Merchant Warehouse, Inc. where he spouted the same old invalid argument that giant banks want American’s, Congress and the Federal Reserve to believe merchants will not pass on to their customers the billions in savings from the new Durbin lower debit fees.

Surprisingly, Mr. Helgeson acknowledges that his company WILL
pass on to its merchant customers the lower debit fees, even though they
are not required to.  As a merchant (retail and eCommerce business owner) I am perplexed that Mr. Helgeson would risk his entire company, his merchant customers and perhaps soon-to-be former customers by taking sides with the giant banks by spouting their propaganda.  MasterCard and Visa’s member banks reap nearly $62 billion dollars a year from these merchant interchange swipe fees, which were designed forty years ago to cover antiquated carbon copy analog payment network.

Unlike the electronic payment network member banks which are without real competition (MasterCard and Visa wield 80% market power), merchants will all be compelled to rebate all saved interchange fees.  Merchants will not JUST lower prices, but we will hire more employees, invest in infrastructure and transparently benefit the economy rather than just the banks’ vaults.  Even so, the legal argument is being clouded by the bank’s multi-million dollar advocacy campaign.  The last thing Citigroup, JPMorgan Chase, Bank of America, Wells Fargo and thousands of other banks want you to know is that the argument is not about refunding savings to consumers, but rather it is all about anticompetitive illegal price-fixing.

As a lead plaintiff, suing MasterCard, Visa and major banks in what could be the largest anti-trust litigation in our nation’s history, I have been leading the battle against them for half a decade. For news and commentary updates follow WayTooHigh.com and Twitter

Mitch Goldstone
President & CEO
ScanMyPhotos.com

Fed seeks to dismiss TCF lawsuit over debit-card #swipefees | StarTribune.com

The Fed argued that TCF could not claim a loss of private property, because the bank does not actually have a “protected property interest” in its debit-card income. Rather, these fees are determined by Visa and other factors beyond TCF’s control. The Fed governors argued that TCF must identity a property interest before it can state a claim that its private property rights were violated.

via Fed seeks to dismiss TCF lawsuit over debit-card fees | StarTribune.com.

ISO-chief-predicts-changes-debit-interchange – PaymentsSource #SwipeFees

The Federal Reserve Board’s proposed new debit-interchange rates are unlikely to go into effect this summer without some significant changes, the co-chief of a large independent service organization speculates.

via iso-chief-predicts-changes-debit-interchange – PaymentsSource Article.

Dodd-Frank tensions headline Senate hearing #SwipeFees

Touching on a Dodd-Frank rule that restricts debit card fees, an issue of concern to banks and card groups such as Visa Inc, Federal Reserve Chairman Ben Bernanke told the panel a small-bank exemption from the fee may pose problems.

via Dodd-Frank tensions headline Senate hearing.

Banks, merchants argue over a fee cap for transactions | The Des Moines Register | DesMoinesRegister.com

The banks and credit unions are up against the merchants, and billions of dollars are at stake.

via Banks, merchants argue over a fee cap for transactions | The Des Moines Register | DesMoinesRegister.com.

Credit card companies blast debit #swipefees cap | Des Moines Register Staff Blogs

Visa, Mastercard, the companies that process most debit card transactions in America and set the interchange fees that are being so hotly debated right now, have both registered their opposition to the Durbin Amendment in recent days.

via Credit card companies blast debit swipe fee cap | Des Moines Register Staff Blogs.

Visa, MasterCard, banks gain ground in fight over fees | San Francisco Business Times

Bankers fighting against a proposed cap on the “interchange” fees they charge retailers on debit-card transactions appear to have gained some ground, with major regulators criticizing elements of the proposal.

via Visa, MasterCard, banks gain ground in fight over fees | San Francisco Business Times.

Fed Might Rethink Capping Debit Card Swipe Fees – The Consumerist #swipeFees

The Fed told Congress yesterday that it might rethink the plan to cap debit card swipe fees at 12 cents per swipe.

via Fed Might Rethink Capping Debit Card Swipe Fees – The Consumerist.

Debit card fees: Limits on banks’ debit card fees hit a snag – latimes.com

Every time a debit card is swiped, the merchant pays the bank an average of 44 cents to process the transaction. The Federal Reserve, saying the actual cost was drastically lower, proposed in December to cut the fee that large banks charge to 12 cents per transaction.

via Debit card fees: Limits on banks’ debit card fees hit a snag – latimes.com.

Brawl over debit fees continues at hearing – MarketWatch

In prepared testimony before the U.S. House of Representatives Financial Services Subcommittee on Financial Institutions and Consumer Credit, trade groups for retailers such as convenience stores and supermarkets say there’s no price competition and represent, after labor, the biggest operating cost they have

via Brawl over debit fees continues at hearing – MarketWatch.

Bernanke Says Fed Uncertain on Small-Bank ‘Swipe’ Fee Exemption – Bloomberg

Federal Reserve Chairman Ben S. Bernanke told lawmakers the central bank’s governors are uncertain that an exemption for lenders with less than $10 billion in assets from its proposed caps for debit-card “swipe fees” will help the smaller lenders.

via Bernanke Says Fed Uncertain on Small-Bank ‘Swipe’ Fee Exemption – Bloomberg.

Interchange Price Cap Rule – The Hill’s Congress Blog #SwipeFees

Today, the House Financial Services Committee will hold a hearing on the Federal Reserve’s proposed rule on interchange fees to review the implications and consequences of the interchange price cap amendment.

via Interchange Price Cap Rule – The Hill’s Congress Blog.

Citi CEO Pandit Warns of Debit Fee Cap Impacts – Bank Systems & Technology

Citigroup will try to continue serving all of its customers cheaply by using new technology, including mobile and online banking services, Pandit said Tuesday. (Reporting by Maria Aspan, editing by Dave Zimmerman)

via Citi CEO Pandit Warns of Debit Fee Cap Impacts – Bank Systems & Technology.

Banks come out swinging against new federal regulations on swipe-card fees

Currently, banks receive an average of 1 to 2 percent of each debit card purchase, totaling $16.2 billion in 2009.

via Banks come out swinging against new federal regulations on swipe-card fees.

Swipe-Fee Reform Efforts Continue | CSP Daily News / Magazine | Services – CSP Information Group, Inc. – news for convenience & petroleum retailing.

Longtime 7-Eleven franchisee Dennis Lane was on hand last July when President Barack Obama signed into law an act including a provision to reform credit-card and debit-card interchange fees. But while he was honored to take part, he does not consider the fight over.

via Swipe-Fee Reform Efforts Continue | CSP Daily News / Magazine | Services – CSP Information Group, Inc. – news for convenience & petroleum retailing..

Swipe Fee Fights Returns To Capital Hill : Convenience Store Decisions

Thursday, Feb. 17, marks the eighth public hearing on debit and credit card swipe fees. The hearing, scheduled for 10 a.m. is set to be held in the House Subcommittee on Financial Institutions and Consumer Credit, and will review debit card swipe fee provisions included in the financial services reform law. Testifying on behalf of the Merchants Payments Coalition is Doug Kantor, general counsel for NACS, and David Seltzer of 7-Eleven.

via Swipe Fee Fights Returns To Capital Hill : Convenience Store Decisions.

Debit card fee fight returns to Congress | Reuters

The proposed caps would shave some $13 billion off the industry’s annual $23 billion in debit card processing revenue, according to CardHub.com, and could also terminate some of Visa and MasterCard’s exclusive processing deals with banks.

via Debit card fee fight returns to Congress | Reuters.

Credit Card Fight Swipe Fees

$2 out of every $100 you spend using plastic goes to unfair swipe fees that increase the cost of everything, even if you pay by cash.

via Fight Swipe Fees.com

NACS Credit Card Interchange Fee Overview [#SwipeFees]

(source: NACS)

Credit Card Fees

 

The largest component of these fees is interchange (also known as “swipe fees”), which is a fee charged by the cardholder’s bank to the retailer’s bank and passed on to the retailer. Since 2001, interchange fees have tripled and last year cost Main Street businesses and American consumers roughly $48 billion. Interchange fees are far higher than the actual processing costs and risks involved, yet these transactions fees continue to rise.

NACS is urging Congress to persuade the credit card companies to explain their fees, practices and policies to our industry and the public. In addition, NACS is asking Congress to level the playing field between merchants and the credit card companies to enable honest negotiations concerning rates and terms of credit card acceptance. This issue is a primary focus for NACS. Click on the links below to learn more about recent legislation:

• What does the Durbin amendment do?
• Facts about Durbin and banks
• Small banks and the Durbin amendment
• Pro-swipe fee reform letter from Reps Welch, Shuster and Carney
• Swipe fee reform misrepresentations by banking industry allies
• List of U.S. Representatives against swipe fee reform
• Letter from U.S. Representatives against swipe fee reform

NACS is the named plaintiff in a class action suing not only Visa and MasterCard, but also their issuing banks. This suit has been combined with over 40 other suits and has been given the lead status in the U.S. District Court for the Eastern District of New York. At the same time, NACS has helped form the Merchants Payments Coalition, which is working for a more competitive and transparent credit card fee system that better serves American consumers and merchants alike.

• Credit Card Interchange Fees
  Credit card companies and their member banks engage in anti-competitive activities to collectively set the outrageous rates they charge retailers for processing transactions. This behavior has forced the convenience and petroleum retailing industry to pay the credit card companies more than twice as much as it makes in annual profit. NACS is pursuing legislation to address this problem.
• Credit Card Expiration Date
  Legislation passed both U.S. House of Representatives and the Senate to clarify retailer responsibilities when printing credit and debit card transaction receipts. Current law is intended to remove the threat of frivolous lawsuits and help with the defense of already filed litigation.

NACS retail members cite credit card fees as their third largest store-level operating expense, following labor and rent. In 2008, the convenience and petroleum retailing industry reported a pre-tax profit of $5.2 billion and $8.4 billion paid in credit card fees. At the motor fuel dispenser, credit card fees are often greater than the profit a retailer earns on each gallon sold.

MasterCard VIP Experience Winner at the Westwood One Backstage at the GRAMMYs Event

Radio and TV host and GRAMMYs veteran shares show tips with the MasterCard VIP Experience Winner at the Westwood One Backstage at the GRAMMYs Event

Mastercard U.S. Markets President Chris McWilton on how the limits on bank fees will impact consumers #SwipeFees

What Are Credit Card Merchant Interchange #SwipeFees?

 

What are swipe fees?

A swipe fee is a fee collected from retailers by the credit card companies and their member banks every time a credit or debit card is used to pay for a purchase. This fee is also known as “interchange.” This fee varies with type of card, size of merchant and other factors, but as much as $2 of every $100 you spend on plastic goes to card issuers. Credit and debit card interchange collected by Visa and MasterCard banks totaled about $48 billion in 2008, triple what it was in 2001. These fees raise prices for consumers. In 2008, the average American family paid about $427 in interchange fees.

How much do hidden swipe fees cost consumers?

Swipe fees add to the price of everything we buy, even if we choose not to use a credit or debit card. Americans paid about $48 billion in credit card swipe fees in 2008 alone, more than all other credit card fees combined.

How are swipe rates determined?

 

Visa and MasterCard each separately work with their member banks to set swipe fees. The agreement between these banks, which should compete for business, is illegal price fixing and it hurts consumers and merchants.

How fast are swipe fees increasing?

 

Visa and MasterCard collected about $48 billion in swipe fees in 2008, triple what was collected in 2001. In 2008, the average American family paid about $427 in swipe fees.

Swipe fees are rising the fastest on gasoline purchases; payouts to the credit card industry have more than doubled since 2004.

Credit card companies and their member banks have increased the amount of swipe fees collected by both increasing rates and encouraging more people to pay by plastic instead of cash.

Don’t these fees just cover the cost of processing the transactions?

Even though advances in technology continue to bring down the cost of transaction processing, swipe fees keep going up. A recent study concluded that only 13 percent of the swipe fees that the big credit card companies collect actually goes for transaction processing. Most of the money goes toward profits for the banks, rewards programs that benefit mostly affluent cardholders and direct mail marketing campaigns that clog mailboxes with nine billion unsolicited credit card offers every year.

Many of those unsolicited mailings include so-called “convenience checks”that can be stolen and cashed by someone other than the authorized card holder. Yet the card companies and their banks spend only four percent of the swipe fees they collect on measures to protect consumers from this and other forms of credit card fraud.

How do swipe fee rates in the U.S. compare to fees in other countries?

 

U.S. swipe fees average close to two percent, while in other industrialized countries like Australia the rate is one-half of one percent and in Europe the rate for cross border transactions is less than one-third of one percent.

Why are swipe fees so high in the U.S.?

 

Visa and MasterCard each separately work with their member banks collectively to set the price of swipe fees. This is illegal price fixing and hurts Americans. Credit card swipe fees have tripled since 2001 and there’s no end in sight, even though the actual cost of transaction processing continues to go down.

Do consumers who pay with cash also pay hidden swipe fees?

source:

http://fightswipefees.com/about.asp

Fed Draws `Broad and Deep Bank Opposition on Durbin Debit-Card Fee Rules – Bloomberg

The Fed has proposed capping debit-card interchange fees charged to merchants at 12 cents for each transaction, replacing a formula that averages about 1 percent of the purchase price.

via Fed Draws `Broad and Deep Bank Opposition on Durbin Debit-Card Fee Rules – Bloomberg.

Credit card companies figure out how to spin straw into gold

Credit card companies figure out how to spin straw into gold http://t.co/8zhvgGe via @washingtonpost #swipefees