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WASHINGTON -- Following Visa's issue of its interchange fees last month, the chairman of the Merchants Payments Coalition, Mallory Duncan, criticized MasterCard's incomplete release of its interchange rates on its Web site, www.mastercardmerchant.com.
"This is a small step in the right direction toward transparency but without full and unrestricted access to the operating rules that explain why Visa and MasterCard charge so much it's still only one piece of the puzzle," Duncan said. "The excerpts provided on the MasterCard website and the background materials included in today's announcement don't begin to go far enough."
MasterCard published its interchange rates on Monday, stating that along with the interchange rates that are applied to US merchants, comprehensive information including qualifying criteria for each rate was provided for merchants to understand the rates and how they apply.
"Just publishing rates alone could lead to confusion among merchants who may be seeing this information for the first time," said Walt Macnee, president, Americas, MasterCard. "We are confident that we are providing merchants with the information they need to understand the interchange rates and structure and determine which rates may apply to their transactions."
Macnee also stated that MasterCard encourages an ongoing dialogue with merchants, acquirers and interested parties on the format and content of its published rates, which will be updated regularly. The company usually updates its interchange rates every six months, and will post the latest rates on its Web site going forward.
But Duncan noted "More light needs to be shed on the excessive interchange rates merchants and consumers are forced to pay on every credit and debit card transaction. MasterCard's list includes nearly 150 combinations. The shear number of rates alone is testimony to the opacity of the interchange system and the need for true transparency."
"Merely disclosing the rates is not sufficient," he added. "If MasterCard believes interchange is 'necessary and efficient' as they say in this announcement, we believe the rates charged should be competitively set at a 'necessary and efficient' level. The rates shown here go well beyond that point."
The coalition, founded in part by NACS, is composed of 20 trade associations representing retailers, restaurants, supermarkets, drugstores, convenience stores, gas stations, on-line merchants and other businesses that accept debit and credit cards. It is fighting for a more competitive and transparent card system. The coalition's member associations collectively represent about 2.7 million stores with approximately 50 million employees.