Tuesday, August 23, 2005

"Private Lable Credit Cards Have No Interchange Fee..." (Paymentech)

The lure of private label credit cards: Private label's heritage runs deepest in the petroleum industry, tracing its roots back to the traditional gas card that consumers were expected to pay off each month. Yet while it was never intended as such, consumers began to treat private label cards as they would a traditional credit card — loaned money. Last year, consumers spent more than $20 billion on private label petroleum cards, even though transaction volume was down by 7 percent, according to the September 2004 Nilson Report.

As interchange costs continue to increase, private label cards are resurfacing as a choice payment option for retailers. Here's why ... Private label cards have no interchange (in the traditional sense as defined by the card associations)

(source: Paymentech)