Mastercard to disclose interchange rate schedule; caps fuel purchase fees

Mastercard to disclose interchange rate schedule; caps fuel purchase fees

In a bid to appease US merchants angered by interchange fees charged on card transactions, MasterCard says it will start publishing its interchange rate schedule and will cap fees it charges on fuel purchases.

The change follows the dozens of anti-trust lawsuits filed by US retailers and trade groups against MasterCard, its rival Visa, and many card issuing banks over the setting of interchange fees.

In a hearing before the Senate Judiciary Committee in July, retailer representatives urged Congress to charge both MasterCard and Visa with violating anti-trust laws over the $26.3 billion in credit card interchange fees collected each year.

In a bid to appease retailers, MasterCard says it will publish its US interchange rate schedule on its Web site by 1 November 2006. Joshua Peirez, group executive, global public policy for MasterCard, says merchants have requested that the firm publish its US interchange rate information.

"The merchant community believes that having access to our rate schedule will provide additional transparency," he says.

MasterCard will also cap fees on fuel purchases. Peirez says merchants have voiced concern about interchange fees on rapidly rising gasoline prices.

The cap will apply to consumer credit and debit cards and will provide benefits to gasoline retailers on credit card transactions of around $50 or more. The change could, for example, reduce interchange by as much as 21% on a $60 purchase, says Peirez.

"We believe that putting a cap on interchange fees when consumers use their MasterCard cards for gasoline purchases will benefit all gasoline retailers, as well as consumers who recognize that their purchases are faster and more convenient when they use their MasterCard cards at the pump," he adds.

MasterCard is also being pursued by EU anti-trust authorities over the setting of interchange fees in European markets.

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