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 toconsumers 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 creditcard 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 theother 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 muchmoney credit card companies are taking out of their pockets behind their backs."
"Credit card interchange fees are a top concern for U.S. convenience andpetroleum 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 CommerceCommittee's Subcommittee on Commerce, Trade and Consumer Protection holds a hearing on "The Law and Economics of Interchange Fees" at 10 a.m. Wednesday.
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 acredit or debit card is used. Visa and MasterCard's non-negotiable contracts with merchants require that the fee be built into the advertised price ofmerchandise, 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 Associationof 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 - www.nrf.com
