June 9, 2009
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News: FL Gas Stations Hail CC Fair Fee Act
Just a few months ago consumers were crying out about the unfair and deceptive practices of the credit card industry. After the passing of new legislation to curb these practices, things have begun to quiet down. However, another storm is brewing as merchants embark on their own battle against credit card issuing magnets. Members of several Florida retail organizations including the Florida Petroleum Marketers and Convenience Store Association conducted an investigation on interchange fees charged by credit card networks like Visa and MasterCard. Results of their research indicated that in 2001, merchants paid nearly $16 billion in interchange fees to just Visa and MasterCard; in 2008 that number rose to $48 billion.
According to some Florida gas station owners, these card fees are among their highest expense line items; ranked second under payroll. Merchants are not the only organizations speaking out against the high interchange fees; government agencies who accept credit card payment for services pay the same high fees. Manatee County Florida's tax collector, Ken Burton, says although fees are high, the county has no intention to stop accepting credit card payments. On the other hand, four other Florida counties, Brevard, Marion, Osceola, and Walton have all stopped accepting card payments because interchange fees have just become too costly.
Florida gas station owners say that since the interchange fee is based on a percentage of sales, as gas prices increase, fees increase. The credit card networks say that gas station owners are free to decline card payments. However, gas station owners say with most consumers using their cards to make over 50% of their purchases, it would put them out of business if they decline card payments. The credit networks also maintain that the merchant gets his money whether the customer pays his card bill or not. They argue that the lender takes all the risks and asking merchants to pay an interchange fee is a small trade off. So, once again the financial industry finds themselves smack in the middle of another round of heated debates among lawmakers as the proposed fair fee legislation is reintroduced in Congress. As things begin to heat up, it is obvious that we can expect to see the Florida Petroleum Marketers and Convenience Store Association at the helm.