NACS Video: Fight Swipe Fees!

NACSTV — April 26, 2010 — NACS, the association for convenience and petroleum retailing, delivered a record-setting number of consumer signatures to Congress on April 27, telling them that hidden credit and debit card swipe fees are unacceptable and that Congress must fix a clearly broken system. Learn more at http://www.fightswipefees.com

PIN Debit News Blog: NACS Interactive Cartoon Depicts Cost of Interchange

The National Association of Convenience Stores has released an interactive cartoon designed to educate consumers about the problem of credit and debit card swipe fees with the hope of involving them in a solution. Called interchange fees by the banks that set the rates, swipe fees are a percentage of each transaction that Visa and MasterCard and their member banks collect from retailers every time a credit or debit card is used. Fees average about 2 percent in the United States.

The interactive cartoon is viewable here.

via PIN Debit News Blog: NACS Interactive Cartoon Depicts Cost of Interchange.

Retail Groups Urge Credit Card Reform in Senate Banking Bill (via NACSOnline)

Legislation unveiled by Senate Banking Committee Chairman Chris Dodd omits credit card interchange fee reform.

 

WASHINGTON – This week Senate Banking Committee Chairman Chris Dodd (D-CT) unveiled a financial regulation overhaul bill that omits an important issue to convenience and petroleum retailers, consumers and small businesses in general: credit and debit card interchange (or “swipe”) fee reform.

Last year, Dodd announced his intention to draft legislation addressing the country’s outrageous interchange fees. It seemed to many that the broad financial overhaul bill would be a natural home for the swipe fee fix.

Retail groups in Washington, while disappointed that this issue was left out of the legislation, expressed a strong desire to work with Dodd and members of the Senate Banking Committee to address swipe fee reform.

“What we are seeing is merely the first draft of the legislation,” according to Lyle Beckwith, NACS senior vice president of government relations.  “This bill is far from complete and we can expect to see more iterations and many amendments offered as it moves through the Senate process. All of this tweaking could allow for swipe fee language to be included.”

“Financial services reform isn’t complete without swipe fee reform,” said Mallory Duncan, general counsel for the National Retail Federation. “Chairman Dodd has acknowledged the impact of these fees on consumers in the past, and we hope to see them addressed in the final version of this legislation.”

Dodd’s legislation faces a tough road ahead — no Republicans are backing the bill yet, and numerous interest groups from the financial services industry are crying foul over provisions that either have been included or excluded. Dodd, however, is confident the bill will pass, although he recognizes some issues remain. “Over the last few months, Banking Committee members have worked together to try and produce a consensus package,” Dodd said. “Together we have made significant progress and resolved many of the items, but a few outstanding issues remain.”

The Hill reports that a full Senate Banking Committee markup is scheduled the week of March 22 and Senate Democrats are hoping to pass the bill before the Memorial Day recess.

Above content from NACSOnline; For more on card fees and what NACS is doing, visit the NACS Issue Page.

Small Business Advocates Commend California Investigative Hearing on Credit Card Fees (NACS)

Hearing provided a critical opportunity to address the impact of hidden swipe fees and review possible solutions.

SACRAMENTO – Monday afternoon, California Assemblyman Pedro Nava, chair of the Assembly Banking and Finance Committee, held an investigative hearing on the impact of hidden credit card swipe fees on California consumers and small businesses. Californians paid nearly $5 billion in swipe fees in 2008.

Small-business owners and advocates know that these hidden fees — which total more than credit card annual fees, cash advance fees, over-the-limit fees, and late fees combined – are crippling Main Street businesses and hurting their customers at a time when they can least afford it.

This hearing provided a critical opportunity to address the impact of hidden swipe fees and review possible solutions. The hearing is particularly notable both because of the size and impact of the California economy in the United States and because Visa’s headquarters are located in the state.

“This hearing is important, because it shows that Assemblyman Nava is listening to his constituents and that he recognizes, at a time when the economy is already so bad, that we can’t afford to let Visa, MasterCard, and the big banks rake in billions of dollars in hidden fees on the backs of small businesses and consumers,” said Mitch Goldstone, president and CEO of ScanMyPhotos.com, an Irvine, Calif.-based retail and online business that feels the impact of ever-increasing swipe fees every day.

“It’s also important that it’s happening in California. First, because we have such a large economy on our own, and reforms that start here often get picked up across the country. And second, because Visa is headquartered in California, this represents a dramatic signal to them that lawmakers are joining small businesses and our customers in saying ‘enough is enough,’” said Goldstone in a press release.

“Reforms are needed to create a transparent process for businesses to negotiate rates and enhance public awareness of interchange fees, which continue to increase,” testified Liz Garner of the Food Marketing Institute the hearing.

“Card companies and banks collect an interchange fee averaging about 2 percent on every credit and debit card transaction, and can raise the rates at any time by any amount,” she said. “We are working for a more competitive and transparent card system that works better for consumers and merchants alike, and hearings like this one are a critical step in that process.”

Credit card interchange fees squeezed American consumers and businesses to the tune of $48 billion in 2008. These hidden fees are set in secret by the banks and credit card companies and charged to store owners every time they run a customer’s credit card.

Americans pay the highest swipe fee rates in the industrialized world. On average, two dollars of every $100 a consumer spends using a credit card goes directly to the credit card industry. That adds up to $427 a year for every American household. Since 2001, the amount Americans pay in swipe fees has tripled.

source: NACSOnline 

FightSwipeFees.com Credit Card Interchange Background

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.

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.

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.

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.

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.

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.

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.

American consumers pay the hidden credit card swipe fee on virtually every purchase they make, whether they use a credit card or not because the credit card companies require merchants to spread the cost of these fees to all of their customers. The system is structured so that credit card companies make more money on each transaction when the price of retail goods increases. For example, even though the cost of processing a $1 transaction is virtually the same as processing a $100 transaction, the swipe fee paid on that $100 sale is higher because the swipe fee is calculated as a percentage of the total sale. The higher the sale, the higher the fee.

A group of retailers, supermarkets, drug stores, convenience stores, fuel stations, and other businesses are fighting against unfair credit card fees. They want a more competitive and transparent card system that works better for consumers and merchants alike and have formed the Merchants Payments Coalition and launched the website unfaircreditcardfees.com. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees.

Convenience stores across the nation, who are among the hardest hit by unfair swipe fees because of the fees assessed to gasoline sales, have taken action to alert their customers about these fees and are collecting millions of signatures urging Congress to reform the system. In addition, this website you are visiting (fightswipefees.com) makes it easy for consumers to sign an online petition to Congress or even send a letter directly to their representatives urging action to reform unfair swipe fees.

Individual consumers are beginning to take action to urge Congress to reform unfair swipe fees. In the summer of 2009, nearly 1.7 million consumers signed petitions at 7-Eleven stores urging such action. This winter, millions more are signing similar petitions in convenience stores across the country or via this website (fightswipefees.com).

A rare bi-partisan consensus has emerged that the forces that drive free enterprise should also drive how swipe fees get set. Currently, Congress is considering legislation specifically focused on this issue as well as other bills that are expected to address reform. The following are key actions taken or expected to be taken in the near future:

• H.R. 2965, the Credit Card Fair Fee Act and S. 1212, the Credit Card Fair Fee Act. These bills are very similar and each will allow merchants to come together and negotiate with the credit card companies and their banks swipe fee rates and acceptance terms. Similar legislation was passed by the House Judiciary Committee in 2008.
• H.R. 2382, the Credit Card Interchange Fees Act. This bill will repeal some of the rules imposed by credit card companies on merchants that are anti-competitive, empower the Federal Trade Commission to take further action if necessary and will require disclosure of swipe fee rates and rules.
• Government Accountability Office report on Rising Interchange Fees (PDF).  This report confirms many of the most harmful aspects of unfair, hidden swipe fees. The report shows that the credit card companies and their issuing banks have been misleading the public about their increasing rates and about the benefits of credit cards to businesses. The report also outlines an unfair, anti-competitive system that hurts Main Street businesses and their customers in order to pad the banks’ bottom lines, with little relation to the actual costs of processing payments.

 

In addition, several national consumer organizations are urging Congress to take action. These include:
U.S. PIRG (Public Interest Research Group). In testimony before the House Financial Services Committee, Edmund Mierzwinski (PDF), PIRG’s consumer program director, supported legislation to reform unfair swipe fees and said:

Interchange fees are hidden charges paid by all Americans, regardless of whether they use credit, debit, checks or cash. These fees impose the greatest hardship on the most vulnerable consumers – the millions of American consumers without credit cards or banking relationships. These consumers basically subsidize credit and debit card usage by paying inflated prices – prices inflated by the billions of dollars of anticompetitive interchange fees. And unfortunately, those interchange fees continue to accelerate, because there is nothing to restrain Visa and MasterCard from charging consumers and merchants more.

Americans for Financial Reform. This is a coalition of 200 national, state and local consumer, labor, retiree, investor, community, and civil rights organizations who have come together to spearhead a campaign for real reform in our banking and financial system. In an official policy paper endorsing swipe fee reformt, the group said:

Markets don’t work when there are hidden fees and rules – and no one hides fees and rules better than the credit card companies. Credit card markets lack the information necessary for both consumers and merchants to make informed choices. For merchants, the markets lack adequate information because the associations prevent merchants from accurately informing consumers of the costs of credit card acceptance or attempting to direct them to more efficient and lower priced payment mechanisms.  In fact, merchants have no alternative but to accept the card associations’ cards even when the associations significantly increase prices.

source: http://fightswipefees.com/about.asp

Be Part of the Biggest Consumer Petition Drive in American History

via NACS Press Release

NACS launches phase two of a consumer petition campaign to tell Congress, ‘’Stop unfair credit card fees.’

ALEXANDRIA, VA – More than 8,000 retail stores have signed up as part of the biggest consumer petition drive in American history. These retailers and their customers are telling Congress, “It’s time to reform unfair credit/debit card swipe fees.”  Now, NACS is empowering other retailers to join the campaign by visiting www.nacsonline.com/fightswipefees.This fall, 7-Eleven franchisees delivered nearly 1.7 million customer signatures to Congress — the largest number of signatures collected for a public policy issue in history — urging members to “Stop unfair credit card fees.” 

Beginning December 15, NACS is coordinating an unprecedented campaign to generate millions more signatures from convenience customers, encouraging Congress to reform unfair credit and debit card interchange, or “swipe,” fees. 

The campaign, the second phase of the industry’s consumer petition campaign, was announced on October 21 at the NACS Show in Las Vegas and immediately generated the participation of thousands of stores throughout the country,.

Both 7-Eleven CEO Joe DePinto and Alimentation Couche-Tard CEO Alain Bouchard, who led his company’s credit card interchange petition drive that collected 400,000-plus customer signatures at its Circle K stores, urged retailers to launch their own petition drive in their stores in a video introduced at the NACS Show. 

NACS has made joining this effort easy. All the materials retailers need to participate in the latest petition campaign are available free of charge at http://www.nacsonline.com/fightswipefees. These materials can be downloaded and sent to a local printer and then displayed in stores. 

If you have not already signed up, visit www.nacsonline.com/fightswipefees today.

NACS Study: US Pays More for Interchange “Swipe” Fees

A new study by the Merchants Payments Coalition finds that Americans pay a much higher percentage for interchange charges than the rest of the industrialized world.

WASHINGTON, DC – A new study by the Merchants Payments Coalition (MPC) found that if U.S. consumers paid the same low credit and debit card swipe fees as consumers in Australia pay, then the net benefit would have totaled $125 billion over the last four years.

Interchange fees, or “swipe fees,” cost Americans an average of $2 on every $100 they spend with credit cards — a higher percentage than anywhere else in the industrialized world. Why? Because other countries and their governments have been able to negotiate with the big banks and credit card companies for fair rates and transparency, the MPC notes. NACS is one of the founding members of the MPC.

But, in the United States merchants and their customers are still forced to pay sky-high interchange fees.

Interchange fees started out in the 1960s as a way for banks to cover the cost of processing credit card transactions. But even as technology has dropped that cost dramatically, the banks and credit card companies have pushed swipe fees higher and higher, turning it into a cash cow. For many businesses, credit card fees are now their single-highest non-labor operating cost.

With almost any other equipment, supplier or service, retailers can comparison-shop, negotiate or otherwise influence its final cost of doing business. Store owners can conserve on energy usage and seek out the most competitive prices for merchandise, just to cite a few examples.

Not so with credit card interchange fees. Visa and MasterCard control more than 80 percent of the marketplace. They set the fees in secret, give businesses no ability to negotiate and virtually insist they be buried in the price of merchandise. Unfortunately, the card companies’ hidden fees get passed on to all consumers in the form of higher prices and lower value for nearly everything they buy.

“It’s bad enough that the credit card companies force these hidden fees on us and our customers when we can least afford it,” noted NACS Vice Chairman of Government Relations Tom Robinson, president of Robinson Oil Corporation. “But when we are paying more than anywhere else in the world, and other countries have taken action to protect their citizens from abuse, it is inconceivable that our government would turn a blind eye to the issue. It is time for Congress to step up and defend the principles of the free-market economy by taking action on (interchange) fees.”

Though Congress and the White House have addressed other credit card reforms, the MPC is arguing that any fix will be incomplete without addressing interchange fees. Consider:

Banks raked in an estimated $48 billion in interchange fees in 2008 – an average of $427 per American household in just one year.

• This $48 billion total is more than triple the amount collected as recently as in 2001.
• Hidden interchange fees cost Americans more than all credit card annual fees, cash advance fees, over-the-limit fees, and late fees combined.
• U.S. interchange fees are the highest in the developed world. The U.S. pays approximately 60 percent of interchange fees globally – about double the U.S. percentage share of global GDP.

Compared to the rest of the world, U.S. interchange fees are more than two times the rates in the U.K. and New Zealand, four times the rates in Australia and more than six times the cross-border rates recently agreed upon by MasterCard and the European Union.

Meanwhile, the payments industry has back with its own “study.”

In a September 17 press release, Visa announced the findings of a new study that shows that “consumers believe retailers benefit far more from accepting credit and debit cards than they pay in costs.

The press release noted that consumers believe merchants see card cost acceptance as a part of doing business, much like paying for utilities such as electricity.

“Retailers and their well-funded trade associations have filed lawsuits and are aggressively lobbying Congress to allow them to shift their business costs to consumers by allowing merchants to charge checkout fees whenever consumers use credit or debit cards. At the same time, national convenience store chains have launched misleading, in-store petition campaigns to cover for their checkout fee efforts, noted Visa’s press release.

“The response is loud and clear: consumers aren’t buying the message convenience store chains and big retailers are selling,” said Bill Sheedy, group president of the Americas for Visa Inc., in the release. “This research demonstrates that consumers are well aware that legislation is a Trojan horse that likely will lead to higher prices for cardholders while retailers pocket the savings.”

NACS Applauds Re-Introduction of Credit Card Fair Fee Act

WASHINGTON — NACS applauded the reintroduction of the “Credit Card Fair Fee Act,” bipartisan legislation introduced today by House Judiciary Chairman John Conyers (D-MI) and Representative Bill Shuster (R-PA) that seeks to address the more than $48 billion that Americans annually pay in credit card swipe fees.

Similar to legislation introduced last Congress by Chairman Conyers and supported by NACS, the bill, H.R. 2695, seeks to help level the playing field for retailers by giving them a seat at the negotiating table with banks to determine the fees assessed for every sale made by credit card, and ultimately reduce the costs of everyday goods for consumers.

Credit card swipe fees — called “interchange fees” by the big banks that set these rates — are a percentage of each transaction that Visa and MasterCard and their member banks collect from retailers every time a credit or debit card is used. These fees average about 2 percent in the United States, the highest rate in the industrialized world.

In 2008, credit card fees cost U.S. convenience stores $8.4 billion — compared to only $5.2 billion in store profits, according to NACS data. Almost all of these credit card fees are attributable to credit card swipe fees.

Currently, credit card swipe fees are set in secret by the banks and hidden from view. Raising these fees is how Visa and MasterCard — which together control more than 80 percent of the U.S. credit card market — encourage banks to issue more credit and debit cards.

“We are delighted that Congress is taking a closer look at these outrageous fees on the heels of its reform of the credit card industry’s abusive lending practices,” said NACS Chairman Sonja Hubbard, CEO of Texarkana, Texas-based E-Z Mart Stores. “Now it’s time to address the rest of the credit card industry’s abusive practices.”

“Right now swipe fees are fixed by the banks, hidden from the public and forced on retailers in a take-it-or-leave-it offer,” said Hubbard. “The Credit Card Fair Fee Act would allow retailers and the card associations to negotiate on equal footing, and we applaud this bipartisan effort to make it happen,” she said.

Over the last several years, the public, consumer groups, the Federal Reserve and Congress have scrutinized unfair credit card practices, policies and fees. Swipe fees have been the subject of multiple hearings in both the House and Senate under both the Republican and Democratic Congresses, and the banking industry has intensely lobbied against any reform — something it continues to do.

“It is simply outrageous that the banking industry — which received hundreds of billions of dollars in taxpayer-funded bailout money — continues to spread fear and misinformation in their lobbying efforts,” said Hubbard. “The bottom line is that unless Congress fully addresses how credit card swipe fees are determined, and why they are set in secret and hidden from consumers, the banking industry will have free reign to establish higher rates and create new hidden fees that continue to punish Americans,” she said.

[source: NACS]

“Visa, MasterCard Plan Processing Fee Hikes” (via CSN)

click here to read more.

From Convenience Store News:

WASHINGTON — New transaction fee rate increases announced by credit card companies Visa and MasterCard are slightly under 2 cents per affected transaction, yet are expected to raise more than $600 million in revenues, according to a report by DigitalTransactions.com

MasterCard will increase its “Network Access and Brand Usage Fee” April 17, from 0.5 cents per transaction to 1.85 cents—a 270 percent increase—while Visa will increase its “Acquiring Processing Fee” from 0.5 cents to 1.95 cents—a 290 percent increase, with additional fees possible, according to NACS—the Association for Convenience and Petroleum Retailing, which opposed the proposed hikes.

“This begs the question: How can two ‘competitors’ announce price increase of nearly 300 percent at the same time in a recession?” NACS Senior Vice President of Government Relations Lyle Beckwith said in a statement. “From what we’ve seen with credit card interchange fees, the answer is obviously that two competitors with excessive and abusive market power can do what they want.”

Merchant-acquiring experts expect merchants to bear the cost of these fees because acquirers will simply pass them through to clients. “The ones we’ve talked to aren’t too excited about it,” an acquiring executive, who asked for anonymity, told the Web site. “It’s one of the bigger fee hikes.”

In a statement Visa told DigitalTransactions.com: “Visa Inc. regularly reviews its pricing, as any business would, and makes adjustments where appropriate depending on such factors as the value delivered to clients and the need to be competitive. Over the years, Visa has become a symbol of international acceptance, reliability and convenience, based on its commitment to provide superior value to clients. These clients, in turn, are able to offer competitive products and services to their customers. Financial institutions set their pricing to cardholders and merchants.”

In 2007, credit card fees cost convenience stores $7.6 billion, with the largest component being credit card interchange fees, which are a fixed fee and a percentage of each transaction, according to NACS. These fees average 1.8 percent in the U.S., which has the highest interchange rate of any industrialized country.

“The credit card fees that U.S. retailers pay are outrageous,” Beckwith said. “These newly announced fee increases are beyond outrageous. At a time when small businesses are feeling the economic pain of the recession, it is unconscionable that Visa and MasterCard can give themselves their own ‘bailout’ by slapping 300 percent increases on their fees.”

“Battle Cry Against Credit-Card Fees” (via CSP)

Industry making progress in interchange fight, said Armour; Oneslager on advocacy

CHICAGO — “There has been no bigger battle and no more important one than our fight to reduce the outrageous credit-card fees that we pay,” said NACS president and CEO Hank Armour during the NACS Show 2008’s Opening General Session. And, based on the progress made and the pressure the industry continues to put on the issue, “2009 looks to be the watershed year in which we may finally get significant relief,” he added. “This is the biggest issue that our industry has faced in decades, and we’ve taken it head on,” said Armour. “With the tremendous help and support of many of you, we made a lot of progress this year.” The Credit Card Fair Fee Act was successfully passed out of the House Judiciary Committee (H.R. 5546), and the legislation was also introduced in the Senate (S. 3086), he said.  “We obviously have the credit-card companies’ attention,” said Armour, referencing some of the public relations stunts that Visa and MasterCard attempted this summer to deflect attention away from the issue of interchange. “While Visa and MasterCard claim they have fixed the problem, they haven’t. The only thing they fix—and they continue to do so—is the price.”  “Honestly, advocacy was never one of my passions,” confessed Balmar Petroleum president and NACS 2007-08 NACS chairman Richard Oneslager during his NACS Show Opening General Session address. “But advocacy is one of my passions today, and for one simple reason: Credit-card fees are destroying our industry.”  Oneslager introduced attendees to a credit-card fee “ticker” that will run throughout the NACS Show, a physical manifestation of what the industry’s $7.6 billion paid in credit-card fees in 2007 looks like per second. Just a few minutes into his presentation, the ticker already topped $100,000.  Despite challenges over low gas margins and high credit-card fees, Oneslager said that the convenience and petroleum industry is poised for continued success because it delivers what consumers want. “We offer them convenience. We save them time. We simplify their lives. We offer them comfort,” said Oneslager. “That is why we are well positioned, in good times and bad.”  Two areas, in particular, present retailers with opportunity, said Oneslager. Foodservice, when executed well, can help many retailers make up for poor motor fuel margins and redefining why people come to our stores. And there is a growing importance of what he called the “refreshment shopping occasion.” Today, nearly 40% of the industry’s gross margin dollars come from beverages—whether packaged beverages, beer or dispensed beverages, particularly coffee.  “I joined NACS because of the value I saw in gaining knowledge—such as what the hot growth categories are—and making connections with other retailers experiencing the same challenges I face,” said Oneslager.  But, he stressed that advocacy is essential. “I would be letting you down, not fulfilling my duty as chairman, if I let you walk out of here today with the belief that running a good business, paying NACS dues, and attending the NACS show is enough. It’s not,” he said. “We are in a battle for our future [with credit-card fees], and it requires all of you to rise up and take action,” he added.  Changing the existing situation with the credit-card companies “will require you to take action,” he stressed. “We are not going to be able to outspend the credit-card companies, so we are going to have to outwork them. Like many of you, I always came to the NACS Show to take things—to take a look at new products and services, and take home ideas that can grow,” added Oneslager. But as more retailers get engaged in advocacy, “you will allow us to take control of our own destinies. And that is the most important takeaway of all.”  The National Association of Convenience Stores (NACS) is the international association for convenience and petroleum retailing, representing more than 2,200 retail and 1,800 supplier member companies. The U.S. convenience store industry, with more than146,000 stores across the country, posted $577 billion in total sales in 2007, with $408 billion in motor fuels sales.

[source: CSP]

“NACS’ CEO Details Progress in Interchange Fee Fight” (via NACS)

CHICAGO — Calling outrageous credit card fees the most important battle faced by the industry, NACS President and CEO Hank Armour said the industry continues to put pressure on the issue, “2009 looks to be the watershed year in which we may finally get significant relief,” he said during the Opening General Session at the NACS Show 2008 on Oct. 5, 2008.

“This is the biggest issue that our industry has faced in decades, and we’ve taken it head on,” said Armour. “With the tremendous help and support of many of you, we made a lot of progress this year.” The Credit Card Fair Fee Act was successfully passed out of the House Judiciary Committee (H.R. 5546), and the legislation was also introduced in the Senate (S. 3086), he noted.

“We obviously have the credit card companies’ attention,” said Armour, referencing what he described as public relations stunts that Visa and MasterCard attempted this summer to deflect attention away from the issue of interchange. “While Visa and MasterCard claim they have fixed the problem, they haven’t. The only thing they fix — and they continue to do so — is the price,” said Armour to applause.

[Source: NACS – CS News, click here to read more]

Merchants and Consumers Welcome Judiciary Committee Passage of Bipartisan Legislation to Crack Down on Hidden and Excessive Credit Card Fees

WASHINGTON, July 17, 2008 /PRNewswire-USNewswire via COMTEX/ — Credit Card Fair Fee Act Would Mean Free Market Transparency, End Card Price Fixing

The retail community welcomed the House Judiciary Committee’s passage of the “Credit Card Fair Fee Act” of 2008 (H.R. 5546) with the support of virtually equal numbers of Republicans and Democrats.

“The days when Visa and MasterCard are able to impose exorbitant fees on consumers are numbered. Now that Congress and the public are learning how credit card fees are driving up the price of gas, food and other necessities, the big credit card companies are in for a very rough ride,” said Richard Oneslager, Chairman, National Association of Convenience Stores (NACS), a member of the Merchants Payments Coalition.

Interchange fees amount to approximately $2 of every $100 spent using credit cards. Credit card interchange fees cost Americans $42 billion last year and inflate the cost of virtually all retail goods, but especially skyrocketing food and gasoline prices. Currently, credit card interchange rates are set in secret, hidden from view, and exclude merchants from the negotiating process.

“From the cost of groceries to the cost of gasoline, working families are feeling the pain in their wallets,” said John Motley, Senior Vice President, Government and Public Affairs, the Food Marketing Institute (FMI), an MPC member. “The abuse of American consumers and businesses by credit card companies and big banks with a hidden fee that drives up the cost of every retail item needs to end.”

The Credit Card Fair Fee Act will allow merchants for the first time to be included in the negotiating process with Visa and MasterCard, separately with their banks, to come up with a voluntary agreement on interchange rates and terms.

“On behalf of our retail members and their customers, NACS applauds Chairman John Conyers and the Republicans and Democrats of the House Judiciary Committee who stood together today to pass H.R. 5546, the Credit Card Fair Fee Act,” said Oneslager. “This strong show of bipartisanship vindicates the efforts of thousands of NACS members that have taken the issue of outrageous credit card fees and practices to Congress. We look forward to similar bi-partisan support by the full House and Senate.”

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 www.unfaircreditcardfees.com.

SOURCE Merchants Payments Coalition

“Rally protests gas prices, credit card fees” (via OC Metro)

Via OC Metro Magazine

Irvine business owner organizes rally to call attention to the fees credit card companies are raking in with rising gas prices.

By Olga BelogolovaPublished: July 03, 2008 04:10 PM

More than 30 people gathered at the corner of Jamboree and Barranca Avenues this morning to protest high gas prices and high credit card fees. The protest, organized by small-business owner Mitch Goldstone, took place during the morning commute.

On the cusp of Independence Day weekend, protesters gathered wearing American flags and patriotic gear.

One of them, Mary Lou Barry of Tustin, dressed in a full American-flag jacket and glistening blue hat, spoke about the gas problem. “People are just accepting it,” she says. “We have to talk about it and maybe get some attention.”

The high gas prices are not only affecting drivers, explained Mitch Goldstone, but independent business owners as well, whom, he says, “are going out of business because of Visa and MasterCard.”

Navdeep Bassi, a 7-Eleven franchise owner, is feeling the weight of these fees. “Credit card fees are killing us,” he says. “We make no profit.”

Also personally affected by the gas prices, Lauren Young came to the protest with her daughter Samaia.

Having no car, Young explains: “It’s hard to get rides because a lot of people don’t want to do it. It makes a lot harder,” Young says, “doctors appointments and everything.”

Overall, organizer Mitch Goldstone was very pleased with the turnout. “Everyone is so passionate about record gas prices,” he explained, “especially right before our holiday weekend.”

Goldstone is the president of ScanMyPhotos.com and 30 Minute Photos, Etc., which are located near the protest location as well as a nearby Chevron station.

For more information about gas prices, credit card fees and Goldstone’s efforts, go to WayTooHigh.com

[source: OC Metro Magazine]

“Gasoline Marketers Underwhelmed by New Visa Interchange Rates” (Via Digital Transactions)

…[F]uel sellers are underwhelmed by the moves. “It looks like it’s more smoke and mirrors,” says a spokesman for the National Association of Convenience Stores, a vocal critic of interchange that represents 2,200 retailers. “There are so many qualifiers. There are some transactions where it makes things worse by swapping a lower percentage for a higher fixed fee.”

Click here to read more.

NACS to distribute pumptoppers to communicate grievance over credit card fees (via Energy Business Review)

The National Association of Convenience Stores has announced that it will make pumptoppers available free of charge to US retailers, to help them communicate their aggravation over escalating credit card fees to consumers and the Congress…. Read more.

What is “Reason Code 96?”

From the National Association of Convenience Stores:

Retailers also are hit with additional costs because of chargebacks, known as “Reason Code 96.” While retailers have not seen the specific rule (no retailer has seen the complete credit card operating rules that they are told to follow) they can be denied payment by the banks if they authorize a pay-at-the-pump transaction for more than $50 for Visa and more than $75 for MasterCard, even though the transaction is not challenged by the customer. As long as fuel prices remain high, “Reason Code 96” will substantially increase the cost of credit card acceptance.

Debit Holds for Fuel Purchases

Gas-buyers Fume at Credit Card Limits, ‘Blocks’

“Fees Fueling Frustration for Region’s Gas Retailers” (Buffalo Business First)

Click here to view article. 

Abstract:

What’s more frustrating, experts claim, has been the inability to get straight answers from credit card companies such as MasterCard and Visa about how such fees are structured.

According to Jeffrey Lenard, spokesman for the National Association of Convenience Stores, approximately 70 percent of all gas purchases were made with a credit or debit card last year.

Lenard cited NACS data, which indicates profits for gas stations and convenience stores in 2006 totaled $4.8 billion.   Credit card companies made more at gas stations and convenient stores than the stores did themselves,” Lenard said.

“The reason for interchange fees, we’re told, is to pay for the technology infrastructure and fraud protection. The U.S. is arguably the best in the world in both these categories. To say that interchange pays for those things is unfathomable to me.”

The amount credit card companies made processing those transactions: $6.6 billion.