US merchants step up fight against interchange fees
17 July 2007 | 5966 views | 0
The Merchants Payments Coalition (MPS) - a group of around 30 American merchant trade associations campaigning against the non-negotiable interchange fees charged by MasterCard and Visa - has launched a series of critical adverts ahead of a meeting of an anti-trust workforce later this week.
MPS says Visa and MasterCard banks collected more than $36 billion in interchange fees last year, up 17% from 2005 and 117% since 2001.
The group says its adverts, which will run in Waashington newspapers, show how credit card companies use some of the billions they collect from the interchange fee to pay for marketing campaigns, rather than for transaction processing.
The coalition says a recent study has shown that card companies and banks spend only about 13% of the interchange fee on actual processing. The rest goes on marketing, profit and other services like rewards programmes.
The adverts aim to show that consumers actually pay for the credit card companies' marketing campaigns via the interchange fee.
The campaign is being launched ahead of a meeting of the House Judiciary Committee's Antitrust Task Force on Thursday. Committee members are expected to use the hearing to examine the impact of interchange fees on consumers and businesses as well as the antitrust law implications of the interchange fee system.