Credit Card Fair Fee Act Introduced by House

Credit Card Fair Fee Act Introduced by House

Posted by John B. Frank Friday, June 5, 2009

Updated: D-Day for Visa/MC?

Legislationseeking to tighten rules on so-called "interchange fees" levied bycredit card companies could hurt transaction processors like TotalSystem Services Inc. and First Data Corp. if it becomes law, a MorganKeegan & Co. analyst said in a research note Friday.

The legislation would yield a mixed bag of results for various otherplayers in the credit card industry, with potentially significanteffects on payment networks like Visa Inc. and MasterCard Inc. as wellas "acquiring banks" like Global Payment Systems Inc., analyst RobertDodd said.

"While we believe the prospect for interchange regulation is real -though far from certain - we believe the impact on the sector would bemixed, generally positive for acquirers and modestly negative fornetworks," Dodd wrote. (Continue reading at Forbes)

Is this the beginning of the end of the "fee ride" given to Visa and MasterCard?

Has the Dynamic Duo(poly) finally met their match?

Have Merchants finally seen a "bill" loaded with "Interchange Fees" that they actually like?

Stay tuned to find out the answers to these and other duo-processing (due processing) questions, as the Federal Government takes on Visa, MasterCard for Round Two.

First it was the consumers crying foul...

This time it's the merchants who are claiming they ~~have been hacked~~, oops, let's change that to: this time it's the merchants who "get to go to the line" and shoot their Interchange "Fee Throws."

They say things happen in three's, so after Visa and MasterCard lose Round Two, Round 3 might involve companies such as HomeATM.

Why HomeATM? Because, we offer the world's ONLY PCI 2.0 certified terminal with PIN Pad specifically designed for eCommerce use. Even though our process cannot "get hacked," (because our data is never in the clear) we still "jumped through their (PCI) hoops"...got certified, and thereafter, we get "slapped" on the wrist most every time we try and get the to the (shopping) "basket" on the web. We've been told that Visa will NEVER allow PIN Debit on the web...which I find hard to believe, based on the recent gaffes in "card not present" security. (or the lack thereof) Put another way...

Online (PIN) Debit for online shoppers is more secure, yet the duo(poly) pushes credit and "offline" debit transactions because of the higher interchange rates. (including the EFT networks pushing the infamous, "Card Not Present PIN Debit" solution offered by a competitor.)

Higher interchange exists because there is higher risk.
Lower Interchange exists because there is lower risk.
Sotware PIN Debit ("Card Not Present PIN Debit Interchange") does NOT exist!!

At the "rate" they are going, (or should I say at their going rate?) I don't see how the dynamic duo(poly) could argue there's a "free market" when it's obviously nothing but a "fee market." Of course, we'd prefer to work "with" Visa than against them. That said, I must say: "Balls in their court...but we "got game!"

U.S. bill could help merchants cut credit card fees | U.S. | Reuters

U.S. bill could help merchants cut credit card fees
Thu Jun 4, 2009 3:53pm EDT

By John Poirier

WASHINGTON (Reuters) - Merchants and retailers would be able to negotiate with banks to reduce costs associated with credit card purchases, according to legislation introduced on Thursday by lawmakers in the U.S. House of Representatives.

The measure, called the Credit Card Fair Fee Act, focuses on the so-called interchange fee that restaurants, service stations and other stores pay banks for credit card-related purchases.

Merchants and some lawmakers have complained that merchants and retailers have been blocked from being able to negotiate a fee structure with credit card networks Visa Inc and MasterCard Inc, whose members are banks.

Visa and MasterCard set the fee structure and control almost three-fourths of the volume of transactions on general purpose cards. American Express Co and Discover Financial Services have their own systems.

Store owners and retailers have also complained that banks collude to set the fee structure and block them from being able to negotiate lower fees, even going as far as calling the practice anti-competitive.

Critics have said those fees are passed on to consumers.

Visa and MasterCard have said merchants and retailers do have the opportunity to negotiate lower fees.

"This legislation will give merchants a seat at the table in the determination of these fees," said House Judiciary Committee Chairman John Conyers in a statement.

"It is not an attempt at regulating the industry and does not mandate any particular outcome. This bill simply enhances competition by allowing merchants to negotiate with the dominant banks for the terms and rates of the fees."

Continue Reading at Reuters

Credot Card Fair Fee Act, House of Representatives, Interchange Fees, HomeATM, PIN Debit

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