Retail industry applauds introduction of Credit Card Fair Fee Act

ARLINGTON, Va. The Retail Industry Leaders Association applauded the introduction of legislation that will address hidden and rising interchange fees charged to merchants and consumers by debit and credit card issuers for the processing of transactions.

S. 1212, the Credit Card Fair Fee Act, was introduced by Senate Majority Whip Richard Durbin, D-Ill.

The bill comes on the heels of similar legislation known as H.R. 2695, the Credit Card Fair Fee Act. It was presented to the House last week by Judiciary Committee chairman John Conyers, D-Mich., and Rep. Bill Shuster, R-Pa.

“The time for action on interchange fees is now, as exemplified by consumer demand for greater transparency and reform of our economy,” said John Emling, RILA's SVP government affairs. “We are thankful that [they] are committed to bringing transparency and competition to interchange rates.”

Currently, MasterCard and Visa dominate the U.S. market with over an 80% market share and thus have no incentive to negotiate interchange fees – even with the largest retailers in the world, RILA said in a release Wednesday. The Credit Card Fair Fee Act will even the playing field and allow merchants a seat at the table in the determination of credit card fees and terms and the ability to negotiate lower interchange rates with card companies and issuing banks.

According to the RILA, hidden charges raise the cost of all goods purchased by Americans and cost consumers $48 billion in fees in 2008.

“This legislation is not an attempt at regulating the industry or boosting retail profits. It simply enhances competition by allowing merchants to negotiate with dominant banks for the terms and rates of fees. Retailers operate within very slim profit margins and do so purposely to ensure that the cost savings will be passed along to consumers in the form of lower costs and better services,” Emling said.