September 30, 2009
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News: MasterCard Fires Back at 7-Eleven
A major credit card network launched its counter attack against the 7-Eleven Convenience store chain. MasterCard responded to the major convenience store chain's petition campaign speaking out against excessively high interchange fees. Interchange fees are the fees merchants pay each time they accept payment by debit or credit card. The fee is typically based on a percentage of the payment transaction. One portion of the fee is paid to the credit card network, another portion is paid to the merchant's bank and a final portion goes to the customer's bank. According to the 7-Eleven chain, the overwhelming success of the petition campaign is proof that customers think the fees are unfair and too high.
MasterCard and Visa on the other hand say they have research that indicates consumers do not object to paying the interchange fee because it is a convenience to use credit cards and is a merchant's cost of doing business. Chris McWilton, President of the U.S. Markets in view of the fact that their reputation is based on convenience and yet they protest the greatest form of convenience. Furthermore, McWilton said that consumers were mislead into thinking they would benefit if transactions fees were reduced. The credit card companies maintain that merchants are pushing their agenda because they do not want to pay for accepting debit and credit which a legitimate cost of doing business.
There will be a gathering in Washington this week where representatives of the 7-Eleven stores and franchisees will be presenting the petition which has nearly 1.6 million signatures. Merchants are asking lawmakers to institute regulations that will all them to be a part of the negotiation proceedings between the banks and card networks. Representatives of both major credit card networks, Visa and MasterCard will also be present. They intend to present their own research in opposition of the petition.