Visa Inc. Statement: Senate Passage of S. 3217 – (via Corp Press Release)

May 22, 2010

Visa Inc. Statement: Senate Passage of S. 3217 – VISA Inc. Corporate Press Release)

SAN FRANCISCO, May 20, 2010 (BUSINESS WIRE) — The following is a statement from Visa Inc. in response to Senate passage of S. 3217:

“We are disappointed that legislation intended to make our financial system safer and fairer for consumers includes an irresponsible and anti-consumer amendment offered by Senator Durbin. Adopted with no debate or review of facts, the amendment allows retailers’ to shift their cost for accepting debit cards onto the backs of consumers while they continue to receive the value of electronic payments — including faster check-outs, ticket lift and guaranteed payment.

“Written and backed by lobbyists representing the nation’s largest retailers, the Durbin amendment could significantly harm consumers. Consumers could have less choice, higher costs and could experience an increase in costs for checking accounts and online banking fees and reduced debit card benefits like fraud protection and rewards. Those who rely on prepaid cards for government disbursement, such as child support, could be particularly hard hit.

“For financial institutions, this amendment could force them to reduce or eliminate valuable debit and checking account services and could especially harm community banks and credit unions that depend on interchange to offer competitive banking services to firefighters, police officers, teachers, veterans, congressional staffers and other customers.

“The Durbin amendment also gives retailers the power to set arbitrary, minimum purchase requirements for consumers choosing to pay with plastic. This means that customers who want to buy a gallon of milk or loaf of bread could be forced to buy more unnecessarily if they use electronic payments at the register. This could be especially devastating for those on a fixed income who rely on prepaid cards for government disbursements such as social security.

“The Durbin amendment is not germane to the overall Financial Reform bill legislation. We hope Congress sees the amendment for what it is — an attempt by retailers to increase their profits at the expense of consumers.”

SOURCE: Visa Inc. via Businesswire

For Visa Inc. 
Steve Burke, 703-683-5004, ext. 108

National Retail Federation Video: Battling Credit Card SwipeFee Monopoly

April 26, 2010

Repost: National Retail Federation Senior Vice President and General Counsel Mallory Duncan Duncan discusses his October 8, 2009, testimony before the House Financial Services Committee and explains how the credit card industry is in an “arms race” to raise “swipe” fees.

NACS Video: Fight Swipe Fees!

April 26, 2010

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

Fight MasterCard and Visa Credit Card Swipe Fees

April 24, 2010

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?
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.

What is being done about it
What are merchants doing to change unfair swipe fees?

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 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 ( 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.

What are consumers doing to change 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 (

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.

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