Truck Stops Applaud Measure to Limit Credit Card Fees
This story appears in the May 24 print edition of Transport Topics.
Truck-stop operators and other retail outlets praised an amendment to the Senate’s financial reform package that would limit the fees credit- and debit-card companies charge stores.
The amendment, proposed by Sen. Dick Durbin (D-Ill.), would allow the Federal Reserve to limit the ability of companies such as Visa and MasterCard to raise so-called interchange, or swipe, fees collected from retailers who accept credit payments.
“Passage of this measure gives small businesses and their customers a real chance in the fight against the outrageously high ‘swipe fees’ charged by Visa and MasterCard,” Durbin said in a statement. “It will prevent the giant credit card companies from using anti-competitive practices, allow merchants to offer discounts to their customers and restore common sense and fairness to this broken system.”
“We are pleased the Senate recognized the need to rein in these exorbitant fees levied on retailers any time a debit card is swiped,” said Tiffany Wlazlowski, spokeswoman for Natso Inc., formerly the National Association of Truck Stop Operators, which represents truck stops and other roadside businesses.
“Truck-stop operators and other retailers have been powerless to negotiate with credit card companies and issuing banks regarding these fees, and passage of this amendment will help restore fairness to the marketplace. Lower interchange rates on debit cards will also allow retailers to pass these savings on to consumers in the form of lower prices and service improvements,” Wlazlowski said.
The fees, which banks charge for the use of cards, are roughly 2% of purchases, a coalition of merchant groups said. In Europe, the group said, the fees are roughly 0.2%.
“This amendment helps big merchants, but consumers will pay the price,” MasterCard said in a statement. MasterCard stated that passage of the provision would allow businesses to “maintain all the benefits they receive from debit-card acceptance while transferring the cost to consumers.”
Visa said in a statement that the amendment “harms consumers, credit unions and community banks and should be eliminated from the bill.”
The Senate approved Durbin’s amendment 64-33 on May 14, with 17 Republicans voting for it.
Durbin told Bloomberg News the change is necessary because the big credit-card companies have “done everything they can to suppress any competition.”
In opposing the provision, the Independent Community Bankers of America and the Credit Union National Association said in a May 12 letter to senators that “nothing would stop Visa and MasterCard from simply applying the artificially lowered interchange rates across the board to all issues, regardless of size, forcing many credit unions and community banks to reevaluate their ability to offer debit cards.”
Another letter, which was signed by more than 130 national and state trade groups, including Natso, said Durbin’s proposal was a “common-sense amendment that would free merchants of anti-competitive restrictions imposed by the credit card companies, allowing merchants to offer discounts when customers use less expensive forms of payment.”
The groups also noted that the bill “exempts all banks, credit unions and thrifts with assets less than
$1 billion, meaning that 92% of all banks, 98% of all credit unions, and 86% of all thrifts would be exempt, allowing them to continue to receive the same interchange fees they receive today.”
