WASHINGTON-The Electronic Payments Coalition, comprised of banks and credit unions, vowed to fight two new bills that would allow large retailers to negotiate bilateral interchange fee agreements on transactions with card issuers.
"This legislation is an attempt by giant retailers to make consumers pay for one of their business expenses-the cost of accepting credit and debit. It's simple: merchants do not want to pay their fair share to accept debit and credit cards, and they want consumers to foot the bill," said the payments coalition, which is comprised of banks, CUNA, NAFCU, Visa and MasterCard.
Both bills, one in the Senate and the other in the House, were debated briefly in the last Congress but died because of lack of support.
They would allow merchants to participate in bilateral negotiations to set interchange fees as an option to the unilateral fee structure imposed by Visa and MasterCard. They would provide for a third-party overseer of the negotiations to bypass antitrust concerns.
"Both pieces of legislation are terrible," said Eddie Ambrose, senior lobbyist for NAFCU. "It allows [large merchants] to set the rates."
Such a process, according to Ambrose, would be harmful to credit unions and other small cards issuers by eating away at interchange fees, which were estimated at almost $5 billion for credit unions in 2008. "It's not lucrative for credit unions, it's necessary for credit unions," said Ambrose. "It's a necessary part of providing members with their cards." Without the fees, he said, cards programs would become unprofitable for many small credit unions, leaving a greater share of the market for the top 10 issuers, which already hold more than 90% of the card market.
