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Credit Card Issuers, Retailers May Face Off Over Fees

by Peter Andrew

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Credit

Card Issuers, Retailers May Face Off Over Fees

Reuters today reports

on a class action suit by retailers who claim that Visa, MasterCard

and a number of major banks are colluding to set high interchange

fees, the fees that merchants pay on each transaction made by

credit card. While the credit card associations and banks say

that retailers are complaining about fees for a valuable service,

retailers claim that the ubiquity of credit card purchasing

has allowed the industry to increase interchange fees without

fear of losing customers.

While

retailers may opt to discontinue allowing credit card purchases

at their businesses, it is questionable whether they can charge

a higher price or special fees to purchasers who pay by credit

card. For example, last week, Connecticut's

attorney general Richard Blumenthal said it was illegal

for several state utilities to add a surcharge to customers

who paid by credit card, but the state's Department of Public

Utilities OK'd the move because the money from the extra charges

were not going to the utilities themselves.

 

Published 01/24/06 (Modified 05/07/12)


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