ApparelNews.net reported that the The Merchants Payment Coalition released a study showing a growing concern from retailers over exaggerated credit card fees. In the US, retailers pay roughly a two percent interchange fee for each credit card purchase. This is compared to a 0.5% interchange fee in Australia, and a 0.3% interchange fee in the EU.
Fed up with paying fees up to six times greater than other countries, retailers are now pushing for action in congress. A bill in the House called the “Credit Card Fair Fee Act of 2009” and the Senate’s “Credit Card Fair Fee Act” propose a system where merchants can together negotiate with banks over interchange fees. These two bills would let merchants have more access to talk to banks in establishing fees. However, Visa and Mastercard retort that merchants have plenty of opportunities to discuss lower fees.
Reform is met with criticism from merchants and consumers alike. About 60% of consumers believe merchants should continue paying the cost of accepting credit cards. Some retailers also believe that reform would benefit large businesses, but would not affect small business.
Last year, US interchange fees were up 33% from 2006. This represents $48 billion in 2008, and $42 billion in 2007. At TransFS.com, we strongly support the reform of interchange fees. Here are some ways for retailers to save on processing costs: (From ApparelNews.net)
1) Buy transaction machines instead of leasing: Buying a machine can cost about $300, while leasing a machine from a fee-processing company can cost $50 for 48 months.
2) Ask customers to use debit cards: Debit cards have lower processing fees, so offering savings on preferred payment methods can often pay off.
3) Use TransFS’s comparison shopping engine: We allow processors to compete against each other to win your business. This results in better pricing for you. We vet all of the processors who bid on our site to make sure they provide the best service and will act in the best interests of you, the merchant (in fact, we even contract the processors abide by certain rules that are merchant friendly).
