Saturday, January 23, 2010

Charge! - Credit Cards Beat Recession

A major cost burden on the retail industry and others is the interchange fees charged by credit card companies.  The fees imposed on swipe a card (swipe fees) averages close to 2% on every purchase.  When negotiating pricing with the processor of the credit card the focus is on the processing fees since the interchange fee is a non-negotiation from the credit card issuers.  Sections of the Credit Card Fair Fee Act of 2009 may open the negotiation of interchange fees with Visa and MasterCard.

The fee is hidden from the consumer and passed along with pricing of products purchased in the retail sector.
Interchange collections totaled $48 billion in 2008, up from $16.6 billion when NRF started tracking the fees in 2001. The higher prices that result from the fees cost the average household an estimated $427 last year, up from $159 in 2001.

“Given a fair wind, we will negotiate our way into the Common Market, head held high, not crawling in. Negotiations? Yes. Unconditional acceptance of whatever terms are offered us? No.” ~ Harold Wilson

NY Times
National Retail Federation

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