NEW YORK -- Banks and payment networks are pressing state lawmakers to bar retailers from charging customers more to pay with credit cards than with debit cards or cash, according to a Bloomberg report.
The laws' supporters say they are trying to protect consumers from unfair costs when they make purchases with credit cards. Utah has already passed a law banning such surcharges, and New Jersey may follow suit. In all, about 20 state legislatures are weighing legislation related to payment cards, according to the report, which cites the American Bankers Association.
The move for state laws is an extension of a decade-long fight between retailers, including Home Depot, Walmart and Target, the convenience store industry, and members of the payments industry, including JPMorgan Chase & Co., the biggest U.S. credit-card lender, and Visa Inc. and Mastercard Inc., the largest networks, over "swipe" fees for debit and credit cards.
Because retailers generally have to pay more to banks when their customers use credit cards than when they buy with debit cards, the banks are trying to prevent stores from steering buyers to debit transactions.
At stake is an estimated $40 billion that banks take in each year from credit-card swipe fees, according to Madeline Aufseeser, a senior analyst with Boston-based consultancy Aite Group LLC.
Banking groups say the push for state laws is not a coordinated campaign by the industry. Instead, Trish Wexler, a spokesperson for the Electronic Payments Coalition, a trade group for card issuers and networks, describes it as an "organic" process of bills arising in states at the same time.
Click here to read the complete Bloomberg report.
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