WASHINGTON -- The Merchants Payments Coalition said it welcomed the decision of Senate Judiciary Committee Chairman Arlen Specter (R-PA.) to investigate credit card companies and their anti-competitive fee-setting practices in a hearing to be held later this month.
We wish to thank Senator Specter for scheduling this very significant hearing, said Mallory Duncan, chairman of the MPC and senior vice president and general counsel at the National Retail Federation (NRF). The Senate Judiciary Committee is an important venue to look into credit card companies [image-nocss] and their illegal price-fixing practices in setting interchange fees.
The Senate Judiciary Committee announced that it will hold a hearing on Credit Card Interchange Rates: Anti-trust Concerns? on Wednesday, June 28.
Interchange is a percentage of each transaction that Visa and MasterCard banks collect from retailers every time their credit or debit cards are used to pay for a purchase. The fee varies with type of card, size of merchant and other factors, but averages close to 2 percent for credit card and signature debit transactions. Total credit and debit card interchange collected by Visa and MasterCard amounted to $26.32 billion in 2004, according to the Nilson Report.
Unlike other credit card fees that show up on a monthly statement, the interchange fees paid by consumers are not disclosed to cardholders because Visa and MasterCard forbid merchants from disclosing them on receipts.
Our members believe it's time to hold Visa and MasterCard accountable and put an end to their illegal price-fixing, their lack of openness with the public and the record windfall profits they're making as a result, said Duncan.
The Merchants Payments Coalition is a group of 20 trade associations representing retailers, restaurants, supermarkets, drug stores, convenience stores, gas stations, online merchants and other businesses that accept debit and credit cards. MPC is fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition's member associations collectively represent about 2.7 million stores with approximately 50 million employees.
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