Convenience Store News: Industry Speaks Out Against Attempt to Stall Changes to Debit Card Swipe Fees
Now, more than 60 national and state organizations representing consumers and merchants are speaking out against any attempts to put the proposed changes on hold, according to the Merchants Payment Coalition. The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants. "Every day of further delay in the Fed's consideration of its proposed rule means another day in which large card-issuing banks are deducting significantly more money out of debit transactions than is reasonable, proportional, or allowable under the law Congress passed," the groups said. "That is why financial industry trade associations are seeking to delay the Fed as long as possible from taking action to update its 2011 regulation — delay preserves what for them is an enormously lucrative status quo."
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Gifts and Decorative Accessories: Merchant Groups Fight Against a Delay that ‘Preserves an Enormously Lucrative Status Quo’
The Merchants Payments Coalition cited that under regulations established in 2011, banks that have at least $10 billion in assets and follow rates centrally set by Visa and Mastercard can charge up to 21 cents per debit card transaction plus 1 cent for fraud prevention and 0.05 percent of the transaction amount for fraud loss recovery. Banks can charge any amount they want if they set the fees themselves, but no major banks have done so. Smaller banks are exempt and can charge as much as they like.
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CStore Decisions: How the $35 Billion Capital One/Discover Acquisition Could Affect Retailers
“(The deal) probably doesn’t make much difference at all. It may mean higher debit card fees, but it doesn’t change any of the dynamics on the credit card side with respect to merchants,” said Doug Kantor, general counsel at NACS and a member of the executive committee of the Merchants Payments Coalition. “So, it looks like it’s mostly some downside on debit, but otherwise a relatively unchanged picture.” For the merger to bring swipe fee competition, Kantor said Congress needs to pass the pending Credit Card Competition Act (CCCA), which would give merchants bargaining power with networks.
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Congressional Hearings Examining Credit Card Swipe Fees
Congress has held 17 hearings examining credit card swipe fees over the past 18 years.
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Gifts and Decorative Accessories: ‘The Card Industry Is Triple-dipping:’ New Data Shows Record Profits for Banks from Fees, Interest Rates
“The card industry is triple-dipping, making millions of consumers pay three times for their credit cards,” MPC Executive Committee member and National Association of Convenience Stores Senior Vice President of Government Relations Lyle Beckwith said. “The largest banks make consumers pay an annual fee whether they use their card or not, then pay higher prices because of swipe fees every time they make a purchase, then pay huge interest rates on the balance."
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New Data Shows Banks ‘Triple Dipping’ By Increasing Credit Card Interest, Annual Fees and Swipe Fees
Recent data shows the rise in credit card “swipe” fees that has driven up prices for consumers by billions of dollars over the past decade has come as banks have also dramatically increased annual fees and the money they take from consumers through interest, MPC said.
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Southern Jewelry News: Merchants say Capital One/Discover deal shows need for Credit Card Competition Act
“This shows Capital One realizes the Credit Card Competition Act is going to pass and wants to be prepared to compete for merchants’ business once that becomes possible,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “Visa and Mastercard lock banks that issue credit cards into a centrally set scheme of fees and prohibit them from allowing competitors on their cards. No merger can change that bar to competition – only legislation can. If the CCCA is passed, Main Street businesses and their customers get competition regardless of whether the merger goes through. But the merger alone doesn’t get us to that goal.”
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Marketplace Radio: The fees war between retailers and credit card companies is heating up
Merchants argue these percentages are averages of hundreds of different kinds of rates for different cards, merchants and situations, and conceal increasing numbers of high-end credit cards that charge merchants higher rates. “A lot of times what Visa and Mastercard will do,” said Doug Kantor, general counsel for the National Association of Convenience Stores (and MPC Executive Committee member), “is they’ll create new rates, leave the old ones in place, and say, ‘Well, we didn’t increase all these rates in here,’ and they sort of average out all their rates, even though they know the banks are issuing more cards at the higher rate.”
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NerdWallet: Could the Credit Card Competition Act Impact Credit Unions?
With assets of over $100 billion, there’s only one major credit union that would be directly impacted by the Credit Card Competition Act. Navy Federal Credit Union has 13 million members — many with ties to the military, including their qualifying relatives — and branches near military installations and overseas. The credit union declined to comment on the potential impact the bill would have on its community. “It only impacts a single credit union,” says Doug Kantor, a member of the Merchants Payments Coalition executive committee and general counsel at the National Association of Convenience Stores. “All the rest are exempt from the bill.”
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NACS Daily: Merchants Say Capital One/Discover Deal Won’t Bring Competition
“This shows Capital One realizes the Credit Card Competition Act is going to pass and wants to be prepared to compete for merchants’ business once that becomes possible,” MPC Executive Committee member and NACS General Counsel Doug Kantor said. “Visa and Mastercard lock banks that issue credit cards into a centrally set scheme of fees and prohibit them from allowing competitors on their cards. No merger can change that bar to competition—only legislation can. If the CCCA is passed, Main Street businesses and their customers get competition regardless of whether the merger goes through. But the merger alone doesn’t get us to that goal.”
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