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    Electronic Payments Coalition Opposes Interchange Reform Legislation

    Front for financial services companies claims merchants want consumers to foot the bill for their costs of accepting credit and debit.

    WASHINGTON, D.C. -- The Electronic Payments Coalition, an organization representing payment card networks, financial services companies, and financial services trade associations, reacted quickly to oppose new legislation introduced last week by Congressman John Conyers (D-Mich.) and Representative Bill Shuster (R-Pa.).

    Called the "Credit Card Fair Fee Act," the bipartisan legislation seeks to address the more than $48 billion Americans annually pay in credit card interchange fees.

    But, according to the rhetoric from the coalition, it is merchants, not consumers, that the bill seeks to protect.

    "This legislation is an attempt by giant retailers to make consumers pay for one of their business expenses—the cost of accepting credit and debit. It's simple: merchants do not want to pay their fair share to accept debit and credit cards, and they want consumers to foot the bill," said the Electronic Payments Coalition in a release.

    The Coalition also charged that if this legislation passes, American families will end up footing retailers' bills when it comes to accepting debit and credit cards. In 2008, credit card fees cost U.S. convenience stores $8.4 billion—compared to only $5.2 billion in store profits, according to NACS, -- the Association for Convenience and Petroleum Retailing, which, like other merchant groups, applauded the re-introduction of the legislation. Almost all of these credit card fees are attributable to credit card swipe fees, said NACS.

    However, the financial industry’s position is that merchants that accept credit and debit cards benefit from more sales, lower costs and greater profits. "It is only fair that they pay a fee for this service,” said the coalition.

    What isn’t fair, according to NACS, is that credit card interchange fees are set in secret by the banks and hidden from view. Raising these fees is how Visa and MasterCard—which together control more than 80 percent of the U.S. credit card market—encourage banks to issue more credit and debit cards, argue critics of the credit card industry.

    In a statement earlier last week, NACS Chairman Sonja Hubbard, CEO of Texarkana, Texas-based E-Z Mart Stores, said: "We are delighted Congress is taking a closer look at these outrageous fees on the heels of its reform of the credit card industry’s abusive lending practices. Now it’s time to address the rest of the credit card industry’s abusive practices."

    The Electronics Payments Coalition’s release continued to accuse "giant" retailers of trying to pass costs on to consumers even though describing convenience stores as "giant" retailers strains the organization’s credibility.

    "At a time when American families everywhere are struggling to make ends meet, they shouldn't be forced to pay more so giant retailers can profit at their expense. We understand every business wants to find ways to cut overhead costs for valued services, but forcing consumers to pick up the bill for giant retailers just isn't fair."

    The organization continued: "Consumers pay their bills. Giant retailers should pay theirs, too. On behalf of every American consumer who pays his or her own bills, the Electronic Payments Coalition urges Congress to oppose this harmful legislation."

    Related News:

    NACS Applauds Re-Introduction of Credit Card Fair Fee Act -- June 5, 2009

    Feeling the Pressure—June 1, 2009

    Senate Passes Credit Card Bill -- May 20, 2009

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