Banks Never Met A Fee They Didn't Love (Especially A Hidden One) The nation's largest banks have never met a fee they didn't love, especially a hidden one they can blame on someone else. Take, for example, the outrageously high and hidden fees banks and credit card companies charge for virtually every consumer transaction, commonly known as swipe fees. The banks complain that merchants might show these fees to consumers (derided as surcharging), but the real problem is price-fixing. The credit card companies set the schedule of swipe fees for their member banks to charge. All the bank members of a card network then agree to charge the same fees rather than compete on price. This price-fixing has made U.S. swipe fees the highest in the industrialized world. While banks say they do not support surcharging, the truth is banks want merchants to do their dirty work for them by having merchants collect the fees from their customers and then pass it on to them, into their pockets. Consumer advocate Ed Mierzwinski of the Public Interest Research Group wrote: "we doubt many merchants will impose extra surcharge fees on their credit card customers because they don't want to upset their customers and lose sales." Bingo. To stay competitive in the marketplace, merchants need to keep prices low. Swipe fees have tripled in the past decade, and merchants have no way to negotiate with Visa and MasterCard to lower the fees. The two companies control 80% of the marketplace. Consider this: Ø Merchants don't know what the fee will be when a customer swipes a credit card until their bank statement arrives. There are more than 240 different fees, depending upon the type of card and the merchant who accepts the card. Ø The banks that issue cards are Visa and MasterCard's customers, not the consumers who use the cards. Under the current system, Visa and MasterCard are motivated to keep banks happy, not consumers. Ø Merchants paid banks more than $30 billion last year in credit card swipe fees – money that could have been used to create jobs and lower prices. If Congress would
step in and stop the price fixing, U.S. consumers could benefit from reduced swipe fees, as in Europe where the fees are eight times lower. For more information contact: Liz Poston Merchants Payments Coalition 202-207-3638
[email protected]
### The Merchants Payments Coalition (MPC) - UnfairCreditCardFees.com - is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and 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.
