Credit Card Issuers, Retailers May Face Off Over Fees
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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.
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