National Restaurant Association Applauds House Panel for Review of Unfair Credit Card Interchange Fees

Washington, DC – The National Restaurant Association today applauded the House Judiciary Committee Antitrust Task Force for holding a hearing to review the interchange fee pricing practices of credit card companies. 

“Today’s hearing presents an important opportunity for further investigation into an issue that poses an enormous burden to small businesses, including restaurants, across the country,” said Mike Shutley, Director of Legislative Affairs for the National Restaurant Association.  “We are pleased that Congress is shedding light on this unfair credit card process, and are confident it will lead to making the system more competitive and transparent so that it better serves consumers and merchants alike.”

The credit card interchange fee is a percentage of each transaction that Visa and MasterCard member banks collect from retailers every time a credit or debit card is used to pay for a purchase.  The fee varies with type of card, size of merchant, and other factors, but averages close to two percent, or about $2 for a $100 purchase. Visa and MasterCard banks collected more than $36 billion in interchange fees last year, up 17 percent from 2005 and 117 percent since 2001.

According to a recent study, the credit card companies and their banks spend only about 13 percent of the interchange fee on actual processing. The rest goes for marketing, profit and other things like rewards programs.

Unlike other credit card fees that show up on monthly statements, the credit card interchange fee is hidden, and Visa/MasterCard rules make it practically impossible for merchants to tell customers how much they are really paying. Instead, merchants are effectively left to include the fee in the price of merchandise. 

The National Restaurant Association is a member of the Merchants Payment Coalition (MPC), a group of nearly 30 associations representing retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses that accept debit and credit cards are fighting for a more competitive and transparent card system that works better for consumers and merchants alike.  The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees.

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