IRVINE, Calif. -- In honor of Independence Day, WayTooHigh.com, The Credit Card Interchange Report, is holding a rally on July 3 for consumers and merchants—including gas station owners—to "demand independence from Visa and MasterCard's hidden credit card fees that add another 8-10 cents a gallon on top of already skyrocketing gasoline prices." The protest is slated to take place adjacent to a Chevron station in Irvine, Calif.
Mitch Goldstone, editor of WayTooHigh.com—The Credit Card Interchange Report, and president [image-nocss] and CEO of ScanMyPhotos.com and 30 Minute Photos Etc., said in a statement touting the event, ""Service stations owners and consumers are paying record credit card fees as Visa, MasterCard, and their member banks reap the windfall from the 100% increase in the price of gasoline since 2007."
He added, "About $2 of every $100 the consumer spends in stores or buying gasoline goes directly to the credit card industry in the form of the interchange fee, the biggest credit card fee you've never heard of. Interchange started as a fee to pay for credit card processing; it has skyrocketed in recent years. American businesses and consumers paid $42 billion in total fees just in 2007. With $4-plus gasoline, the credit card industry typically makes 8-10 cents per gallon in interchange fees, far more than the service station owner if he or she is making any money at all. (Many owners are currently losing money on every gallon they sell.) Americans shell out as much as or up to $2 per fill up to the credit card industry every time they fill up. Except for OPEC, nobody makes more money from skyrocketing gasoline prices than Visa and MasterCard. The cost of a cashless society is way too high if you let the credit card industry set the price."
Gladstone concluded, "Interchange fees are set in secret by the credit card industry. The Credit Card Fair Fee Act is a solution that would create a competitive market outcome and bring transparency to the broken credit card market by allowing merchants a seat at the negotiating table."Senator Richard Durbin (D-Ill.) earlier this month introduced the Credit Card Fair Fee Act of 2008, legislation that addresses the interchange fee. The House version of the bill was introduced in March by Representative John Conyers (D-Mich.) and Chris Cannon (R-Utah) and has received bipartisan support. The National Association of Convenience Stores (NACS) and other retail groups lauded passage of the bill. (Click here to read previous CSP Daily News coverage.)Critics said the legislation could harm consumers, according to a letter obtained by Reuters. "This bill may actually harm...consumers, not benefit them," Keith Nelson, principal deputy assistant attorney general said in a letter to Representative Lamar Smith (R-Texas), the top Republican on the committee, who requested the department's view on the legislation. "Credit card networks forced by regulation to collect less from merchants may well respond by charging more to cardholders in card fees, or reducing card rewards programs and other features that are attractive to consumers," he wrote.
The comments by the Department of Justice represents the latest support for credit card companies, Visa Inc and MasterCard Inc., in their longstanding battle with merchants seeking leverage to reduce their transaction payments, which increased to $42 billion last year from $30 billion in 2006.
Conyers' bill would set up a three-judge panel to settle unresolved disputes between merchants and the credit card companies. The panel would be appointed by the department's antitrust division and the Federal Trade Commission (FTC). "The department does not support the creation of a regulatory panel to set rates and terms of access," Nelson said.
FTC commissioner William Kovacic in a separate letter, dated June 19, said: "I note particularly that a governmental process for setting prices for private transactions is at odds with the commission's mission and experience in promoting open market competition."
Visa last week said it will reduce interchange rates for fuel transactions, which can lower costs for gasoline retailers, and is implementing a new processing approach for fuel transactions that will enable consumers to buy gasoline more easily and allow motorists and station owners to better avoid the risks and inconveniences associated with pump limits and holds on funds. Many retailers and industry observers continue to be skeptical of the motives and result of Visa's announced changes. (Click here for previous CSP Daily News coverage.)
(Click here for the full text of the the Credit Card Fair Fee Act of 2008, HR 5546.)
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