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

April 20, 2010

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.

Be Part of the Biggest Consumer Petition Drive in American History

November 30, 2009

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 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 These materials can be downloaded and sent to a local printer and then displayed in stores. 

If you have not already signed up, visit today.

“Credit-Card Fees Targeted by Retailers Who Say Banks Overcharge ” (via Bloomberg)

November 28, 2008

Reposted – Bloomberg, reporter Jonathan D. Salant

Nov. 29 (Bloomberg) — The subprime mortgage crisis is giving department and convenience stores and gas stations a new argument in asking Congress for power to negotiate the fees banks charge them to process credit-card transactions.

Retailers such as Target Corp. say banks make so much money from the fees that they give credit cards to people who can’t pay their debts, just as they provided mortgages to homeowners who can’t afford them.

“It’s another version of subprime lending,” said Mallory Duncan, chairman of the Merchants Payment Coalition representing trade groups for 2.7 million gas stations, drug stores, supermarkets and other retailers. “The system should be fixed before we are in a position of having to bail out more banks.”

Duncan, a registered lobbyist, is senior vice president and general counsel of the National Retail Federation, whose board members include Delray Beach, Florida-based Office Depot Inc., Cincinnati-based Macy’s Inc., and Plano, Texas-based J.C. Penney Co.

The merchants want an antitrust exemption so they can band together to negotiate with banks over the so-called interchange fee, usually between 1 and 2 percent of the purchase price, that a retailer’s bank pays the cardholder’s bank each time a customer swipes a credit card. The retailer’s bank then collects the fee from the merchant. Consumers don’t see the charge, which merchants say is built into their prices.

‘Significant Issue’

“This is a significant issue for us, and a very high cost for us,” said Eric Hausman, a spokesman for Minneapolis-based Target, the second-largest U.S. discount retailer. “We do expect the next Congress” to look into the issue, he said.

Retailers say the fees should be part of the discussion when Congress returns in January and looks at overhauling bank rules. So far, the merchants have pushed their proposal without success. The House Judiciary Committee approved it in July, though it hasn’t reached the full House or Senate.

Banking groups and the credit-card companies say the interchange fees ensure that retailers get paid even if cardholders default. If the fees were onerous, merchants wouldn’t be so eager to take credit cards, they say.

“You have a choice of whether or not you want to accept plastic,” said Jason Kratovil, vice president for congressional affairs for the Independent Community Bankers of America, the Washington-based trade group for smaller banks. “If the pros outweigh the cons, you do it. It makes a real pithy sound bite to make it that these big banks are out there to gouge consumers.”

Representatives at Bentonville, Arkansas-based Wal-Mart Stores Inc. and Kohl’s Corp. in Menomonee Falls, Wisconsin, had no immediate comment. Spokesmen for Macy’s, J.C. Penney’s, Office Depot, Hoffman Estates, and Framingham-Massachusetts-based TJX Cos. didn’t return phone calls yesterday.

Credit-Card Issuers

Among the largest credit-card issuers is New York-based Citigroup Inc., which this week received a U.S. government rescue package, including $20 million in cash. Two more credit-card issuers, Bank of America Corp., based in Charlotte, North Carolina, and New York-based JPMorgan Chase & Co., were among nine financial institutions receiving $125 billion from the Treasury in October.

“I am connecting the dots with the credit-card industry and the mortgage industry,” said Lyle Beckwith, a senior vice president with the Alexandria, Virginia-based National Association of Convenience Stores.

The banks say credit-card fees cover operating costs, protect banks against default and fraud, and allow them to offer cards with no annual fees and rewards. The charges vary from bank to bank and depend in part on whether the card includes cash rewards or other benefits.

Without the ability to recoup costs, smaller banks wouldn’t be able to issue cards and compete with the larger institutions, said Paul Weston, president of TCM Bank NA in Tampa, Florida.

Fewer Accounts

“You’d see a reduction in the number of accounts,” Weston said. “You’d dial back the features on the account. Some banks would reintroduce fees.”

Financial institutions and their trade associations formed the Electronic Payments Coalition to oppose the legislation, arguing that merchants are simply trying to reduce costs.

“Like any business, they want to find ways to lower their cost of doing business,” said Trish Wexler, a spokeswoman for the coalition, whose members include New York-based American Express Co., Citigroup and San Francisco-based Visa Inc. “We believe that going to Congress and asking for consumers and for the financial institutions to pay is the wrong way.”

Beckwith, whose organization’s members include Dallas-based 7-Eleven Inc. and San Ramon, California-based Chevron Corp., said banks got away from the business model of determining how much a house was worth and how much a homeowner could afford.

“The credit-card business is run by the same banks the exact same way,” Beckwith said. “They’re not in the business of making loans based on the ability to repay, they’re sending out cards based on a business model of making money off the interchange fee.”

[source: Bloomberg]

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

October 7, 2008
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]

Bank Funded Coalition Fires Blanks With Baseless Press Release

August 1, 2008

The bank funded association called Electronic Payments Coalition issued the following press release which is largely debunked from many of the prior postings.  It is as silly as Senator McCain’s  commercial attempting to link Senator Obama with Brittney Spears and Paris Hilton. 

Personally, I cannot think of anything more anti-competitive than interchange fees, along with Visa and MasterCard’s business model; leading to a nearly $50 billion annual hidden tax on Americans. 

What was so remarkable about the below news release was the public comments by Visa and MasterCard.  Collectively,  Josh Floum, general counsel for Visa Inc. and MasterCard both boldly described their industry as being “fiercely competitive.”  With a staggering 80% market power and unbridled control over the world’s electronic payment network, the reality is they are fierce, but only to protect their cartel at all costs to benefit their member banks, rather than consumers.  Average shoppers are forced, along with merchants, to pay this nearly $50 billion annual hidden tax that is no longer based on cost, but rather pure greed.  Mr. Floum even said that if the Credit Card Fair Fee Act is passed it will “suppress competition and innovation and result in unintended and harmful consequences for consumers.” 

I have not read this type of scare tactic since the Washington, DC, public relations firm, Creative Response Concepts concocted the “Swift Boat” campaign, so I would not be surprised if that firm are also regular readers of

From the below press release, the card association’s claim that their fees on gasoline are only a penny or so a gallon, then why does ARCO discount as much as they do or Mr. Small gas station immediately cut prices by 10 cents a gallon when they have a cash option? And, why are thousands of independent service station owners being forced to close down, as interchange fees have doubled along with gas prices?

The Electronic Payments Coalition press release is reprinted in its entirety, below.

Consumers Looking for Relief at the Gas Pump, Not More PR Spin From Lobbyists in Washington, DC. NACS Pumptopper Gimmick Misleads Consumers about High Gas Prices
July 31, 2008
WASHINGTON, July 31, 2008 /PRNewswire/ — Today, the Electronic Payments Coalition called on gas retailing members of the National Association of Convenience Stores (NACS) not to display “pumptopper” advertisements that mislead consumers about the cause of high gas prices. The NACS ad gimmick is part of a high-cost lobbying campaign designed to provide a financial windfall to the world’s most profitable companies at a cost to consumers.
“American consumers are looking for relief from skyrocketing gas prices — not gimmicks from a high priced lobbying campaign designed to line the pockets of the largest and most profitable retailers,” said Peter Madigan, executive director of the Electronic Payments Coalition. “This sort of deceptive advertising campaign about the cause of high gas prices does not do consumers any good and insults their intelligence.”
Congress is currently considering legislation that would provide large retailers an antitrust exemption that would legalize collusion in order to artificially lower the prices they pay to accept credit and debit cards. This government intervention to lower retailers’ costs of doing business will ultimately increase the cost of credit for consumers, decrease or eliminate card reward programs, and reduce access to affordable credit for those who need it.
As an alternative, the Electronic Payments Coalition has provided free posters and flyers — available as a download through the EPC website ( — to help them educate their customers on the true costs associated with a gallon of gas, as provided by a credible source — the U.S. Department of Energy.
“It is grossly misleading — and frankly not even believable — to imply that the penny or so per dollar merchants pay to accept credit cards has anything to do with skyrocketing gas prices,” said Madigan. “Credit and debit cards offer significant benefits, both to the gas retailers that accept them, and to the customers that pay with them. It is important that consumers have a clear understanding the full picture here.”
According to the Energy Information Administration, which are official energy statistics from the United States government, the price for a gallon of regular gasoline breaks down accordingly: crude oil (74%), taxes (10%), refining (9%) and distribution and marketing (7%).
About the Electronic Payments Coalition
The Electronic Payments Coalition is dedicated to protecting consumer value, choice and competition in the electronic payments system. The coalition is a broad-based group of payment card networks, financial services companies, and financial services trade associations whose primary goal is to educate policy-makers, consumers and the media about the value of electronic payments systems — including economic growth, convenience, speed, reliability, and security — and to ensure the continued growth of global commerce by promoting consumer choice and the stability of the vast payment networks that connect millions of consumers with millions of retailers each and every day.
SOURCE Electronic Payments Coalition

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

July 1, 2008

…[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.

Merchants Say That Visa Fee Cut is Less Than Meets the Eye

June 27, 2008

WASHINGTON, June 27 MPC-Visa-fee-cuts Credit Card Fees on Gasoline Might Actually Be Higher, Not Lower, Under New Visa Program


WASHINGTON, June 27 /PRNewswire-USNewswire/ — Visa’s announcement yesterday regarding new interchange policies on gasoline sales shows that interchange fees raise gas prices, but it’s not clear what else the announcement means. If Visa is willing to admit that interchange fees are causing added pain at the pump, why won’t it admit its role in rising food and other consumer prices? Interchange fees cost Americans $42 billion last year – more than all other credit card fees combined. It inflates the cost of nearly everything consumers purchase whether they pay with plastic or cash.”While the devil is always in the details and we haven’t seen any details yet, it looks like the new structure for credit cards combines a higher fixed fee with a lower percentage fee,” said Hank Armour, President and CEO of the National Association of Convenience Stores. “The net result of this combination may actually be higher fees for those transactions under $60 for those customers using regular Visa credit cards without a rewards program.”

On debit card transactions, the cap on interchange may only apply to gasoline purchases of more than $97.50. That is a small number of transactions – especially because Visa banks reserve the right not to give gasoline retailers anything more than $75 on a sale.

Unfortunately, we may not know the impact for months because Visa has said this will only affect debit card transactions on gasoline in mid-July and won’t affect credit card transactions until October – long after the end of the summer driving season (and the opportunity for Congressional action).

While we welcome ANY recognition by Visa of the interchange fee pain, the confusion and potential negative effects of these changes might have been avoided if this were the result of a negotiation between merchants and Visa. H.R. 5546 and S. 3086, the Credit Card Fair Fee Act, would allow that to happen and ensure a market process for interchange fees with benefits to consumers throughout the country. Visa and MasterCard have a collective 80-plus percent market share and that gives them a stranglehold on retailers. The legislation would counteract that problem. Currently, rates are set in secret and the process is hidden making it practically impossible for retailers and consumers to know how much they are really paying in credit card fees, or why.

The Merchants Payments Coalition (MPC),, 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

.[source: Merchants Payments Coalition]