Merchant Credit Card Processing Swipe Fees

In order to bring attention to the highest interchange, or swipe fees paid for merchant credit card processing in the industrialized world, 7-Eleven store owners delivered a 1.7 million signature petition to US Congress members on September 30, 2009. Even though the petition represents the largest response for any public policy issue on record, Congress is still reluctant to become involved in the war over merchant credit card processing fees. Between 2001 and 2008 the amount paid on merchant credit card processing interchange fees grew from $16 billion to $48 billion, which the merchants claim represents a tax on items purchased by credit card.

Capitalizing on consumers’ displeasure with banks, it was easy to collect the signatures at 7-Eleven stores; Visa representatives claim that customers were misled into thinking that lowering interchange fees would save them money. But store owners explain that the fees they must pay for merchant credit card processing are factored into the price for items that customers purchase. The merchants claim that by allowing higher interchange fees Visa and Master Card are able to attract more participating banks into their networks, which are simply greedy and charge the highest fees they can get away with.

The petition, for which 7-Eleven stores have been collecting signatures since June, 2009 calls for Congress to enact legislation which would place limits on interchange fees. This, according to lobbyists from Visa and Master Card, would amount to unnecessary big government intervention in a free market. The merchants counter that since the big credit card companies command such a large percentage of the market they are in an unfair position to be able to charge exorbitant fees. It will be interesting to see what kind of action Congress takes concerning fees for merchant credit card processing, if any. In the meantime, merchants will have to wait it out while congress decides on whether to take action or not.