Fight over Credit and Debit Card Fees Intensifies, Senator Schedules a Hearing
Sen. Richard Durbin, D-Ill., has scheduled a hearing for Wednesday, June 16, on how much interchange fees cost consumers. Interchange, or swipe, fees are set by Visa and MasterCard and are collected by card issuers every time a payment transaction is processed. Sen. Durbin’s amendment to set limits on debit card fees is vigorously opposed by the credit card industry.
“Fees associated with these transactions cost the federal government over $116 million, making credit and debit cards Treasury’s most expensive collection mechanism,” the department’s Financial Management Service said in the report. The government could save $36 million – $39 million a year by reducing interchange fees, the report said. The federal government accepted more than 80 million credit and debit card payments totaling $8.6 billion in fiscal 2009, according to the report.
Card issuers collect more than $40 billion a year from interchange fees, which range between one percent and two percent per credit card transaction, according to the National Retail Federation.
The credit card industry, for its part, claims that it will be consumers who will be hurt the most, if the amendment remains in the final bill.
“The decrease in merchant acceptance fees which would result from your amendment would simply be borne by consumers – and at a time when consumers are struggling from the steep recession and trying to regain some degree of spending power,” MasterCard Chief Executive Officer Robert W. Selander, said in the letter to Durbin.
(Via Bloomberg.com)
