November 17, 2009
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Merchants' Fight Against Credit Card Companies, Pt.2
Merchants take the stand.Merchants are sending out a call to action as they and the C4CC gathered on a conference call on Monday to develop their strategies in the fight against high credit card interchange fees charged by the credit card industry. Interchange fees are charged by the large credit card networks like Visa and MasterCard for each card transaction. The fees are calculated on a percentage of the transaction including any cash back to the customer. According to Eric Blackledge, owner of Corvallis Furniture, his company pays anywhere from 1.7 percent to 3.17 percent of sales. Most consumers don't realize that these fees ultimately are passed down to the end consumer through increased prices.
Jim Conran of the C4CC believes the credit card companies will soon be going after the merchants to raise profits by increasing the interchange fee. It's an obvious move considering lenders have already drained consumers dry and have sent many to the courts for protection. Conran is asking Congress to cap the interchange rates before lenders have an opportunity to attack the merchants as they have already done to credit card consumers. "We want to make sure those rates are kept at reasonable levels," Conran stated. On the other hand, card companies defend the fees as a necessary cost of business. Where have we heard that one before?
A representative for the Electronic Payments Coalition (EPC) said interchange fees are very reasonable and that merchants reap in large benefits from offering debit and credit card payment options. The EPC maintains that it's a small price for merchants to pay considering they do not take the risks. Banks transfer funds immediately upon completion of the card transactions which they have to wait for the consumer to pay the bill. You know I say? It's the banks job to take the risks. After all, are the banks not the ones that made the decision to extend the credit to consumers?