Merchants Payments Coalition Says New Visa Interchange Fees Will Hit Consumers
WASHINGTON -- While the increases in interchange fees proposed by Visa last week average 0.6 percent, the result will be a 20-percent increase from the $36 billion in total interchange fees paid by consumers in 2006, according to the Merchants Payments Coalition (MPC).
"The average increase in interchange rates doesn't tell the full story because it doesn't reflect credit card companies' efforts to move consumers to premium cards, the growing use of plastic, or the automatic raises Visa and MasterCard receive through inflation and increases in consumer spending," said Mallory Duncan, senior vice president and general counsel of the National Retail Federation (NRF) and chairman of MPC, in a written statement.
Last week, Visa announced that new interchange fees that went into effect April 14 would average 1.77 percent, up 0.6 percent. Most consumers do not know they are paying interchange fees because Visa and MasterCard do not disclose the charge, the MPC stated.
"Interchange fees are already taking too much money out of consumers' pockets. Visa and MasterCard should be lowering interchange rates, not raising them," he added.
Visa's new interchange list showed at least one-third of the 94 rates were above the average, with some as high as 2.7 percent, the MPC stated. Visa and MasterCard collected approximately $36 billion in interchange in 2006, up 17 percent from 2005 and 117.5 percent since 2001, according to MPC estimates.
"Visa and MasterCard would like consumers to believe that interchange is only going up a tiny fraction of a percentage when it's really going up in double-digit numbers and far faster than the rate of inflation or consumer spending," Duncan said. "These fees are ultimately paid by consumers, but working families can't afford these kinds of increases."
"The average increase in interchange rates doesn't tell the full story because it doesn't reflect credit card companies' efforts to move consumers to premium cards, the growing use of plastic, or the automatic raises Visa and MasterCard receive through inflation and increases in consumer spending," said Mallory Duncan, senior vice president and general counsel of the National Retail Federation (NRF) and chairman of MPC, in a written statement.
Last week, Visa announced that new interchange fees that went into effect April 14 would average 1.77 percent, up 0.6 percent. Most consumers do not know they are paying interchange fees because Visa and MasterCard do not disclose the charge, the MPC stated.
"Interchange fees are already taking too much money out of consumers' pockets. Visa and MasterCard should be lowering interchange rates, not raising them," he added.
Visa's new interchange list showed at least one-third of the 94 rates were above the average, with some as high as 2.7 percent, the MPC stated. Visa and MasterCard collected approximately $36 billion in interchange in 2006, up 17 percent from 2005 and 117.5 percent since 2001, according to MPC estimates.
"Visa and MasterCard would like consumers to believe that interchange is only going up a tiny fraction of a percentage when it's really going up in double-digit numbers and far faster than the rate of inflation or consumer spending," Duncan said. "These fees are ultimately paid by consumers, but working families can't afford these kinds of increases."