Small Businesses Offer Senate Testimony Against MasterCard and Visa Over Interchange Fees
Small
Businesses Offer Senate Testimony Against MasterCard and Visa
Over Interchange Fees
Merchant association representatives went head-to-head with
MasterCard and Visa representatives today at a Senate Judiciary
Committee hearing that asked the question “Credit Card
Interchange Rates: Antitrust Concerns?” While merchants
accused MasterCard and Visa of secretly colluding to fix prices
at ever-higher levels, the credit card companies said the dispute
was a business disagreement, and that antitrust does not come
into play when merchants have many other options to accept customer
payments.
Testimony
included that of Kathy Miller, owner of the Elmore Store in
tiny Elmore, Vermont, who said that growing interchange fees
are making it more and more difficult to run her business profitably.
Representatives from MasterCard and Visa said there is no price
fixing and that interchange rates come from the individual card
issuers, not directly from MasterCard and Visa. Joshua Peirez
of MasterCard testified that there is an inconsistency in MasterCard
and Visa being singled out for antitrust concerns when American
Express is known to charge higher rates on average than MasterCard
or Visa issuers.
Interchange
fees are those fees that merchants pay in order to accept and
process customers’ credit card transactions. According to today’s
testimony from Visa General Counsel Joshua Floum, those fees
currently average about 2.2% of each credit card transaction.
Vermont
Senator Patrick Leahy, the Senate Judiciary Committee’s Ranking
Member, acknowledged the arguments of both sides in the dispute.
Leahy noted that the European Union?s Competition Authority
has warned Visa and MasterCard that unless they change their
interchange fees in Europe, they will face an antitrust action.
Whether Congress will take any action concerning this dispute
in this country is still unknown.
Full
testimony from today’s hearing is available at the Senate
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