"We accept credit cards because it's a convenience for our customers," John Schaninger, vice president of sales and merchandising at Quick Chek, told the newspaper. "We have no ability to shop around because there's 10,000 banks that charge the same [image-nocss] fees, and there's nothing that can be done about it."
The grassroots campaign comes as consumers increasingly have turned to debit cards to pay for everything from their grocery bills to gasolinewithout being charged interest.
But it has sparked protests from retailers, who say the interchange fee, the fee banks charge to complete the electronic transaction, has become so expensive that the bank can sometimes walk away with a bigger share of the profit than the retailer.
The use of plastic to pay for merchandise has soared in recent years, said the report. Debit card use, in particular, has increased from 8.3 billion transactions in 2000 to 25.3 billion transactions in 2006, overtaking credit cards in frequency, said the report, citinga report released Wednesday by the Federal Reserve Bank of Philadelphia.
The debit transaction comes at a cost. Convenience store advocates said each time consumers use debit and credit cards, the stores are charged roughly 2% of the purchase price by Visa, Mastercard and the card issuers, or banks.
The formula to calculate interchange fees can vary depending on everything from the item consumers buy to whether consumers using debit cards sign their name or punch in their identification code to complete the sale, said the report.
C-stores said two-thirds of their customers pay by plastic, with debit card use rising fast. A survey last February by NACS found 27% of consumers paid for gasoline with a debit card, up from 21% in 2007. They said it has given banks a windfall; banks in 2008 took in $48 billion in fees, three times more than 2001.
It forces them to raise the prices on their merchandise, the report added. And it is such a hefty fee that it can be their biggest expense other than labor. But they say they have no choice but to accept the transaction fee, NACS spokesperson Jeff Lenard said. "Every other cost is negotiable," he told the newspaper. "You can figure out rent, labor expenses, utilities costs. But this is a fee that keeps growing and is nonnegotiable."
QuickChek's petition drive comes after 7-Eleven delivered more than 1 million signatures from customers who urged Congress to curtail the rising interchange fees, Lenard said.
Congress has introduced at least one bill that would regulate interchange fees more heavily, said the report. But banking advocates said negotiating an interchange fee agreement with each of the 16,000 credit card issuers is notreasonable. And the campaign by c-stores is simply an attempt to shift the transaction's cost to consumers, it added.
"These fees exist for a reason," Trish Wexler, spokespersonfor the Electronic Payments Coalition,representing financial services companies, told the paper. "It's a matter of who should pay for these fees. Should merchants pay for these fees or should customers? The merchant receives lots of benefits."
Schaninger said the industry is so competitive that Quick Chek would pass any savings from lower interchange fees to customers. For now, he told the paper, all he can do is hope customers pay for their items with cash.
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