WASHINGTON, Feb. 14 /PRNewswire/ -- The Merchants Payments Coalition today
welcomed plans to hold a congressional hearing this week on secret fees
totaling almost $40 billion annually that credit card companies charge to
consumers each time a credit or debit card is used to make a purchase.
"Consumers already know about a lot of the fees they're charged by credit
card companies," MPC Chairman Mallory Duncan, senior vice president and
general counsel at the National Retail Federation, said. "They know about the
interest they pay and the late charges and the over-limit charges and all the
other fees credit card companies seem to charge just because they can. What
they don't know is that credit card companies are charging them a secret
checkout fee every time they use their cards. This hearing is going to help
bring that secret fee into the spotlight and let consumers know just how much
money credit card companies are taking out of their pockets behind their
backs."
"Credit card interchange fees are a top concern for U.S. convenience and
petroleum retailers and a diverse coalition of merchants," National
Association of Convenience Stores President and CEO Henry O. Armour said.
"There has not been nearly enough information and discussion about these fees
in the past, so this hearing is an important step toward informing Congress
and the public about the impact that high interchange rates have on U.S.
consumers."
Armour is scheduled to testify when the House Energy and Commerce
Committee's Subcommittee on Commerce, Trade and Consumer Protection holds a
hearing on "The Law and Economics of Interchange Fees" at 10 a.m. Wednesday.
The hearing will be held in Room 2123 of the Rayburn House Office Building in
Washington and is open to news coverage. NACS is one of the founding members
of the MPC.
The subject of the hearing is interchange, a secret fee of about 2 percent
that Visa, MasterCard and their member banks charge consumers each time a
credit or debit card is used. Visa and MasterCard's non-negotiable contracts
with merchants require that the fee be built into the advertised price of
merchandise, forbid the fees from being shown on receipts, and effectively
block cash discounts from being offered in most situations. Other credit card
companies don't charge interchange as such because of differences in the way
payments are handled, but nonetheless charge similar fees to process
transactions.
Visa and MasterCard alone collected $27.6 billion in interchange fees
during 2004, while transaction fees charged by other credit card companies
brought the total to $39.2 billion, according to MPC figures.
Visa and MasterCard kept interchange fees largely secret for years, but
the issue has emerged as a major public policy concern in the past year. The
Federal Reserve held a conference on the subject last May, and the House last
fall passed legislation -- still pending in the Senate -- that would have
required a Federal Trade Commission investigation into interchange's role in
rising gasoline prices. Nearly 50 lawsuits have been filed in federal court
claiming that interchange practices violate federal antitrust law.
The Merchants Payments Coalition was formed last year by trade
associations representing retailers, restaurants, supermarkets, drug stores,
convenience stores, gas stations, on-line merchants and other businesses that
accept credit and debit cards and are concerned about the increasing
interchange fees charged by banks and credit card companies to process credit
and debit transactions.
Coalition members include the American Petroleum Institute, the Food
Marketing Institute, the International Association of Airport Duty-Free
Stores, the National Association of Chain Drug Stores, the National
Association of College Stores, the National Association of Convenience Stores,
the National Association of Theater Owners, the National Council of Chain
Restaurants, the National Grocers Association, the National Restaurant
Association, the National Retail Federation, NATSO (the National Association
of Travel Plazas and Truckstops), the Petroleum Marketers Association of
America, the Retail Industry Leaders Association, and the Society of
Independent Gasoline Marketers.
SOURCE Merchants Payments Coalition
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Related links:
http://www.nrf.com
CONTACT:
J. Craig Shearman of National Retail
Federation, +1-202-626-8134, shearmanc@nrf.com; or Jeff Lenard,
of National Association of Convenience Stores, +1-703-518-4272,
jlenard@nacsonline.com
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