Monday, August 28, 2006

Interchange Is No Small Change (

If you have traveled to Las Vegas recently, the latest spin on slot machines is the electronic valuation button. Rather than playing at a quarter or dollar machine, casinos make it easier and faster to pocket your money. There are fewer coin-operated machines; most just accept paper currency. And, they have this new feature - you choose the machine's valuation for each spin. From 25-cents, to $1, $2, $5. It is your choice - don't forget to always play the full value.

This certainly is no small change, especially if you are accustomed to leisurely playing the quarter machines. Get a few lucky jackpots and you feel compelled to instantly change the currency to a richer denomination.

The difference between a casino and Visa® or MasterCard® is that at least you know what you are playing in Vegas. The rates keep changing, but you are in control. When consumers use their debit and credit cards at a store, doctor's office or anywhere that cards are accepted - because there are nearly one-hundred differing interchange fees - it is anyone's guess what the actual fee will be. And, that is just how the credit card associations like it.

As a retailer and ecommerce business-owner, we have no clue what the individual merchant interchange fees are. But, like millions of other merchants, we too know it is no small change.

Each year the banks reap billions (~$25-billion last year) from these fees which they control by agreement and stand accused by us of illegally fixing the prices on.