Digital Transactions: Merchants Hit Back at a Banking Group’s Request That the Fed Hold off on Reducing a Debit Interchange Cap
The Merchants Payments Coalition fired back late Monday at a request last week from the American Bankers Association that the Federal Reserve not act on a proposal to lower a longstanding limit on the interchange banks can earn on debit card transactions. In a letter to the Fed, the MPC argues the banking industry wants to extend the “status quo” on debit interchange, which it argues Visa Inc. and Mastercard Inc. set at “lucrative levels that exceed the reasonable and proportional standard Congress established.” “We urge the Board to reject the ABA’s request for further delay in the finalization of the Board’s necessary and long-overdue Reg. II updates,” the MPC says in its letter to Fed chairman Jerome Powell.
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Merchants Ask Fed to Reject Bankers’ Request to Delay Action on Debit Card Swipe Fees
MPC urged the Federal Reserve to reject a request by the American Bankers Association to withdraw or delay action on the Fed’s proposal to reduce how much big banks are allowed to charge merchants to process debit card transactions. MPC encouraged the Fed to quickly finalize the proposal instead.
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PYMNTS: Merchants Payments Coalition Urges Fed to Finalize Interchange Fee Proposal
The Merchants Payments Coalition is urging the Federal Reserve to quickly finalize the Fed’s proposal to reduce the fees banks are allowed to charge merchants to process debit card transactions. The group said this in a letter to Federal Reserve Board of Governors Chairman Jerome H. Powell that it sent in response to a Dec. 12 letter from the American Bankers Association, which urged the Fed to withdraw the proposal, according to a Dec. 12 press release. “The banking industry wants to extend for as long as possible the status quo in which covered debit card issuers are able to have Visa and Mastercard fix interchange rates on their behalf at lucrative levels that exceed the reasonable and proportional standard Congress established,” the MPC said in its letter. “Each day of delay means another day of excessively high fees that accrue to the ABA’s larger members and that are borne by Main Street merchants and their customers.”
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USA Herald: Credit Card Fee Law Faces Legal Challenges in Illinois Federal Court
The Merchants Payments Coalition also issued a statement celebrating the ruling Friday and noting that three of its member associations have asked to join the suit. MPC Executive Committee member Doug Kantor said in the statement, “Illinois small businesses and their customers, along with workers who depend on tips, will benefit from protection against Visa and Mastercard’s abusive swipe fees under this law.” “The judge agreed that Visa and Mastercard cannot burden businesses and consumers with fees on taxes and tips,” said Kantor, who’s also the general counsel for the National Association of Convenience Stores. “The card industry will still collect billions in swipe fees in Illinois alone under this law, but it is a key first step in bringing swipe fees under control. We look forward to the law taking effect against Visa and Mastercard in July.”
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Digital Transactions: An Injunction Against Illinois’s Interchange Act Leaves Both Sides Claiming Victory
“The law will go forward with respect to Visa and Mastercard,” says Doug Kantor, (MPC Executive Committee member and) general counsel for the National Association of Convenience Stores, which earlier this year petitioned the court to join the IIFPA lawsuit as a defendant. “There will be another hearing and maybe some appeals, but for now it is clear Visa and Mastercard, which set interchange rates, will have to comply with the law,” when it goes into effect next July.
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Law360: Banks, Not Credit Cos., Can Duck New Ill. Fee Law For Now
The Merchants Payments Coalition also issued a statement celebrating the ruling Friday and noting that three of its member associations have asked to join the suit. MPC Executive Committee member Doug Kantor said in the statement, "Illinois small businesses and their customers, along with workers who depend on tips, will benefit from protection against Visa and Mastercard's abusive swipe fees under this law." "The judge agreed that Visa and Mastercard cannot burden businesses and consumers with fees on taxes and tips," said Kantor, who's also the general counsel for the National Association of Convenience Stores. "The card industry will still collect billions in swipe fees in Illinois alone under this law, but it is a key first step in bringing swipe fees under control. We look forward to the law taking effect against Visa and Mastercard in July."
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Merchants Welcome Ruling That Visa and Mastercard Must Comply with Illinois Ban on Swipe Fees on Sales Tax
MPC welcomed a judge’s ruling that credit card payment networks like Visa and Mastercard must comply with Illinois’ ban on swipe fees on sales tax and tips.
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Digital Transactions: The ABA’s Letter to the Fed Is the Latest Salvo in the Battle Over Debit Card Interchange
But merchants have long argued the Durbin cap is too high, and would remain so even with the proposed reduction. In a comment letter it sent to the Fed in May, the Merchants Payments Coalition, which lobbies on behalf of retailers on payments policy, contended the proposal would cut banks’ allowable interchange by “less than a third even though banks’ average cost of processing a transaction has fallen by nearly 50%–from 7.7 cents just before the current rate was set to 3.9 cents as of 2021.”
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RV Pro: OHI, Campground Leaders To Advocate for Credit Card Legislation
Next week, members of OHI (Outdoor Hospitality Industry) leadership along with 14 campground members from across the country will join forces with the Merchant Payments Coalition in Washington, D.C., to advocate on Capitol Hill for the Credit Card Competition Act – legislation that will provide competition in the credit card swipe fees marketplace and ultimately save small businesses like RV parks and campgrounds thousands of dollars.
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Forbes: Tariffs May Be an Inflation Worry But So Are Credit Card Processing Fees, Some Say
While many Americans worry about tariffs potentially boosting inflation, merchants continue to warn of a cost increase that's already certain: credit card swipe fees. Swipe fees are often merchants’ second largest expense after labor and eventually get passed down to consumers, experts said. They already cost the average household more than $1,100 annually, up from $900 in 2021, and will continue to climb unless Congress acts, according to the National Retail Federation. While consumer prices have risen about 20% since the pandemic, swipe fees have increased by 50% and hit a record $172 billion in 2023, the Merchant Payments Coalition estimates.
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