ARLINGTON, Va. -- Along with retailers and groups in the convenience store and gas station industry, associations representing closely related channels have also voiced their support for recently passed interchange-fee legislation.
The Food Marketing Institute (FMI) released the following statement from president and CEO Leslie G. Sarasin about the hearing by the House Financial Services, Financial Institutions & Consumer Credit Subcommittee on swipe-fee reforms passed by Congress last year:
"Swipe fees have spiraled out of control for small businesses, including [image-nocss] your locally owned grocery store. Despite the fact that the cost of processing these transactions has decreased, swipe fees have tripled in the past decade for small businesses.
"Visa, MasterCard and the world's biggest banks are spending billions of dollars to protect their unfair and highly lucrative status quo. Yet, nothing is more frightening to small businesses than an unpredictable cost increase that is not budgeted for, especially when the increase is excessive.
"Bipartisan swipe fee reforms passed by Congress last year will bring competition and fairness to the broken debit payments market. We strongly urge members of Congress to stand up for small businesses by ensuring these reforms are implemented on time and as written."
FMI conducts programs in public affairs, food safety, research, education and industry relations on behalf of its 1,500 member companies--food retailers, wholesalers and suppliers--in the United States and around the world. FMI's U.S. members operate approximately 26,000 retail food stores and 14,000 pharmacies with combined annual sales volume of $680 billion--three-quarters of all retail food store sales in the United States. FMI's retail membership is composed of large multi-store chains, regional firms and independent supermarkets.
Peter Larkin, president and CEO of the National Grocers Association (NGA), released the following statement following the subcommittee hearing:
"[The] hearing helped expose once again the anticompetitive and excessive swipe fees paid by small businesses and ultimately consumers by the card networks and big banks. It isn't surprising that they are fighting congressional and Department of Justice efforts to reform a broken system as each day of delay generates an additional $125 million of profit out of the pockets of Main Street businesses and consumers. By reforming this broken system, Congress has interjected competition back into the marketplace allowing merchants to more aggressively compete to the benefit of the American consumer.
"NGA strongly urges Congress to allow the Federal Reserve to continue their rulemaking process without delay."
NGA is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. Members include retail and wholesale grocers, state grocers associations, as well as manufacturers and service suppliers.
The National Restaurant Association (NRA) and its members are sending a strong message to Congress to support the timely and accurate implementation of a law passed last year to make merchant swipe fees for debit cards more reasonable, it said in a statement.
The House Financial Services panel's subcommittee on financial institutions and consumer credit is holding a hearing on the issue today. The NRA is represented as an executive committee member of the Merchants Payments Coalition (MPC), a broad coalition representing millions of businesses, from restaurants to florists and c-stores.
The association sent a letter to every member of the U.S. House Financial Services Committee, urging committee members to support full implementation of the Durbin Amendment, which Congress passed last summer as part of the financial-services reform bill. The amendment was approved by a 64 to 33 vote, with strong support from Democrats and Republicans.
The NRA "urges you to allow the Federal Reserve to continue the process of implementing the provision as directed under the law," said association executive vice president for policy and government affairs Scott DeFife in the letter.
The system of fees and contractual restrictions that Visa and MasterCard place on everyone who accepts their cards as payment, including restaurants, is not working, DeFife said.
"Many of these swipe fees and restrictions benefit the card networks and card-issuing banks at the expense of merchants--and ultimately, consumers," said DeFife. "Swipe fees on debit- and credit-card transactions, which amount to $48 billion annually, have been a growing expense for restaurants, and are the third highest cost for many establishments, usually following only labor and food expenses."
He added, "Debit transactions are directly drawn from a consumer's checking account, yet the interchange rate on debit transactions continues to increase. This provision would modernize our financial payments system, provide relief to businesses who have seen their interchange fees skyrocket in recent years and benefit consumers in the form of lower prices. We urge your support in allowing the Federal Reserve process to continue without delay."
The Durbin Amendment authorized the Federal Reserve to publish regulations to ensure that the swipe fees merchants get charged when guests pay by debit card are reasonable and proportional to the cost of processing those transactions. The Federal Reserve issued proposed regulations in December. The proposal is due to be finalized by April 22 and go into effect by July 22.
Founded in 1919, the NRA is a leading business association for the restaurant industry, which comprises 960,000 restaurant and foodservice outlets and a workforce of nearly 13 million employees.
(Click here for previous CSP Daily News coverage.)
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