"I will be testifying as a small convenience/gas retailer and as a bank owner," Carpenter, who is president of J.D. Carpenter Cos., Urbandale, Iowa, told CSP Daily News. "The credit-card companies have inundated D.C. with small community banks and credit unions saying that reducing interchange will have a huge impact on them. This is simply not true, so I will do my best to debunk [image-nocss] that myth."
The Credit Card Fair Fee Act of 2009, among other things, would require the rates and terms of a voluntarily negotiated access agreement to be the same for all merchants and participating providers, regardless of their respective category or volume of transactions. It would require issuers, acquirers, owners and merchants to make specified disclosures regarding itemized costs and access agreements. It also would requires the negotiating parties to file jointly with the Attorney General any voluntarily negotiated access agreement that affects any market in the United States or elsewhere.
Carpenter is testifying on behalf of NACS, of which he is the vice chairman of the Convention & Events Committee.
In 2009, the total amount convenience retailers paid in credit-card fees dropped for the direct time in at least five years.
Since 2005, the amount credit-card companies earned in interchange fees (or swipe fees) from c-stores has surpassed the c-store industry's entire profitby more than a 2-to-1 ration in 2007.
Last year, credit-card fees totaled $7.4 billion, down nearly 12% from $8.4 billion in 2008, according to NACS' preliminary State of the Industry data unveiled earlier this month. Total industry pretax profit totaled $4.8 billion in 2009, down 7.6% from $5.2 billion the previous year.
While on the surface the drop in credit-card fees is encouraging, Greg Parker, president and CEO of the Parker Cos., Savannah, Ga., and vice chairman of NACS' Research Committee, said the decrease mainly is the result of a decline in motor fuel sales. "Our fuel net margins are much lower than in 2008," he said during the NACS 2010 State of the Industry Summit in Chicago.
In 2007, the year with the widest gap between interchange fees and pretax profit, credit-card companies made $7.6 billion off c-store sales, while the c-store industry took in $3.5 billion in pretax profit, the lowest amount since 2003.
J.D. Carpenter Cos. was founded by Dave Carpenter's grandfather in 1935. The company has been involved in many facets of the industry, ranging from retail stores in Michigan and Iowa to multiple bulk fuel and propane plants to a petroleum terminal on the Mississippi River. The company divested those operations and started a new chain of retail stores called ShortStop. Today, it directly operates eight ShortStop convenience stores and leases 12 locations to another retailer operator.
Carpenter also operates five Soaks tunnel car-wash locations, a common carrier business and three Prolube Oil Change Centers. Carpenter has been a member of the NACS board since 2002 and previously served as a member of its Member Services Board Committee and Research & Development Committee. Carpenter is former chairman of the Petroleum Marketers & Convenience Stores of Iowa.
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