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U.S. Sen. Dick Durbin, D-Ill., on June 9 made a brief appearance before the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, warning lawmakers of the need to investigate possible collusion between Visa Inc. and MasterCard Worldwide in the setting credit and debit card interchange rates.
June 9
I have always felt that these organizations (the banks, networks and card brands) were "synched up" on pricing, thus the decades old process of pricing changes coming out at the same time and being virtually the same ["
I also know that U.S. merchants pay the highest interchange rates of any country in the world yet we have the most sophisticated fraud prevention methods and technology assets anywhere. And when debit started exploding in the mid nineties the industry was caught off guard.
Here PIN based debit was touted as a product with low fraud exposure which allowed them to offer really low fees associated with those transactions. And now, since PIN based debit has become a dominant payment method in the market place, the (formerly) associations and the owner banks want to re-price debit so that their income is closer to credit simply because the exodus to debit has hit them so severely in the pocket book. I think it is a shame that rather than trying to come up with better systems, ideas, marketing assistance, consumer programs to the benefit of all players, they have simply tried to find more ways to screw the merchants, i.e., hand off PCI compliance to the merchant, load the merchant with the work load of monitoring at-POS processes.
I don't like to see the government involved in business any more than my fellow businessmen, but when left to their own designs greed will ultimately win out. Whether the results are the best for the community at large or not.
Stephen Prince
National Business Products
Nolensville, Tenn.
