Industry to Congress: Lower Credit Card Fees

A coalition of retailers today launched a campaign to lobby Congress to require credit card companies to negotiate with retailers in an effort to lower the “interchange” fee, averaging 2%, which retailers pay on each credit card transaction.

The Merchants Payments Coalition launched the campaign this morning during a telephone press conference with representatives of the National Retail Federation, the Food Marketing Institute, the National Grocers Association and the National Association of Convenience Stores (NACS).

The grassroots campaign is attempting to rein in what it called “unfair and hidden” interchange credit card fees. In its initial phase, the campaign, which has already begun its paid advertising, will target at least seven key House members on the Financial Services Committee, which is about to take up related legislation to rein in these fees.

The campaign, consisting of thousands of merchants who are struggling to hold off greedy big banks and rising unfair hidden credit card fees, will include a six-figure advertising buy in local districts. The ad buy will include radio, print, online, and television spots calling on the seven members of Congress to support related legislation.

Thousands of merchants and coalition members across the country in all channels of retail will also launch a grassroots effort to contact their member of Congress to give small business and consumers a helping hand in this economy.

The campaign is calling on members “to stand up to credit card companies and big banks who, after the disaster of the sub prime mortgages, are still practicing predatory lending with credit cards, charging huge, hidden fees” that cost Americans $48 billion last year alone, the groups said in a joint statement.

These interchange fees are threatening to squeeze thousands of merchants out of business and are costing hundreds of dollars per year for the average household. In our current economic crisis, these fees are a burden to millions of Americans struggling to make ends meet and a drain on our national recovery.

Interchange fees have increased 300% in the past seven years, said Jennifer Hatcher, group vice president of government relations at the Food Marketing Institute. The coalition said $48 billion interchange fees were paid last year.

Scott Hardman, chief executive of Rutter’s Farm Stores in central Pennsylvania, said, “Credit card interchange fees were $4.6 million for my stores alone. In this economy, this directly affects my business and also my customers.”

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