Making Santa’s Naughty List This Christmas: The Banks

WASHINGTON--(BUSINESS WIRE)-- The following press release was issued by the Merchants Payments Coalition:

The banks have been naughty all year gouging consumers on hidden fees, yet it’s those consumers – and merchants – who will get a lump of coal in their stockings.

The National Retail Federation estimates Americans will spend an average $806 this holiday season on gifts, food and decorations – the most since the trade association started tracking holiday spending more than a decade ago.

If consumers pay with a debit or credit card, the banks charge merchants a fee to process the transaction. Visa and MasterCard so dominate this market that they price-fix the fees so their member banks can charge merchants exorbitant rates.

Those bloated fees can run up to 4 percent on credit cards, which means the banks can pocket more than $32 on $806 – about 800 times what it costs to process the transactions.

Congress introduced moderate reforms that lowered debit-card fees, but the banks still charge five times what it costs them to process a debit payment. With credit cards, they make up to a 10,000 percent profit.

We consumers pay these hidden fees in the form of higher prices, even if we don’t use a card. That, of course, hurts the poorest people the most.

Some retailers pay more in swipe fees than they earn in profits. The fees have swollen into many retailers’ second-largest operating expense. With their skimpy profit margins, merchants must recover some of the cost by raising prices.

The damage goes far beyond higher prices. With less spending power for consumers, businesses – especially small ones – lose sales and can’t expand, hire more people or offer better salaries and benefits.

These fees, in short, let the banks hold a major sector of the U.S. economy hostage.

To liberate consumers, retailers and the huge chunk of our economy that is retailing, we need competition and transparency on swipe fees now.

The Merchants Payments Coalition (http://www.unfaircreditcardfees.com/) represents retailers, restaurants, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses fighting against unfair credit card fees and for a more competitive and transparent system fair for consumers and merchants alike. The coalition’s member associations represent 2.7 million stores with 50 million employees.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151218005066/en/

Merchants Payments Coalition
Michael Flagg, 202-253-4164
[email protected]

Source: Merchants Payments Coalition

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