WASHINGTON, D.C. February 6, 2007 – Consumers overwhelmingly believe that Visa and MasterCard should disclose the $30 billion in hidden “interchange” fees they charge each year and consumers want Congress to do something about it, according to a new poll released today by the Merchants Payments Coalition (MPC) that was conducted by Harris Interactive®.
“The way credit card companies hide interchange fees is indefensible,” said Mallory Duncan, senior vice president and general counsel at the National Retail Federation and chairman of the MPC. “Interchange fees add up to twice what consumers pay in late fees but they’re kept secret and never disclosed to consumers. Consumers want that to end. They want to know how much they’re paying.
”Nine out of 10 U.S. adults believe credit card companies should disclose how much they charge in interchange fees and how those fees are set. Consumers also want Congress to require credit card companies to be more forthcoming about their policies and practices.
The poll found the following results:94 percent said credit card companies should be required to disclose to consumers the amount of interchange fees they charge.
- 93 percent said credit card companies should be required to inform consumers how interchange fees are set.
- 91 percent said Congress should require credit card companies to be more open about their policies and practices regarding interchange fees.
- 91 percent disagreed that credit card companies should be allowed to set interchange fees without notification to consumers.
- 83 percent disagreed that credit card companies should be allowed to continue to charge interchange without change to their current policy.
Interchange is a percentage of each transaction that Visa and MasterCard collect from retailers every time a credit or debit card is used to pay for a purchase. The fee varies with type of merchant, transaction and card, but averages close to 2 percent for most credit card and signature debit transactions.
According to MPC, Visa and MasterCard interchange fees totaled $30.7 billion in 2005, up 17 percent over 2004 and an 85 percent increase since 2001. The average family in the U.S. pays more than $300 each year in hidden interchange fees.
Unlike other fees that appear on the cardholder’s monthly statement, credit card company rules make it virtually impossible to inform consumers how much they are paying in interchange fees. The Harris Interactive survey found that 68 percent of U.S. adults had never heard of the interchange fee.
Release of the poll comes as interest in the interchange issue is growing in Congress. Senate Banking, Housing and Urban Affairs Committee Chairman Christopher Dodd, D-Conn., said last month that he plans to hold a hearing on interchange as part of a series of hearings looking into credit card industry practices. The Senate Judiciary Committee and a House Energy and Commerce Committee subcommittee held interchange hearings last year.
About the survey
This survey was conducted online within the United States by Harris Interactive via its QuickQuerySM online omnibus service on behalf of The Merchants Payments Coalition between January 16-18, 2007 among 2,214 adults (aged 18 and over). Figures for region, age within gender, education, household income and race/ethnicity were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
With a pure probability sample of 2,214 one could say with a ninety-five percent probability that the overall results would have a sampling error of +/- 3 percentage points. Sampling error for data based on sub-samples would be higher and may vary. However, that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated. The full results of the poll can be found at unfaircreditcardfees.com
The MPC, a group of nearly 30 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses that accept debit and credit cards are fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees. For further information, please visit unfaircreditcardfees.com
About Harris Interactive®
Harris Interactive is the 12th largest and fastest-growing market research firm in the world. The company provides innovative research, insights and strategic advice to help its clients make more confident decisions which lead to measurable and enduring improvements in performance. Harris Interactive is widely known for The Harris Poll, one of the longest running, independent opinion polls and for pioneering online market research methods. The company has built what it believes to be the world’s largest panel of survey respondents, the Harris Poll Online. Harris Interactive serves clients worldwide through its United States, Europe and Asia offices, its wholly-owned subsidiary Novatris in France and through a global network of independent market research firms. The service bureau, HISB, provides its market research industry clients with mixed-mode data collection, panel development services as well as syndicated and tracking research consultation. More information about Harris Interactive may be obtained at harrisinteractive.com.
The MPC, a group of nearly 30 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses that accept debit and credit cards are fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees. For further information, please visit unfaircreditcardfees.com.