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A much-anticipated government report on interchange finally appeared today, and it seemed hardly worth the wait. After months of studying interchange rates and how they affect card issuers, merchants and consumers, the Government Accountability Office says rising rates have raised costs for merchants, but the current proposals for regulating such fees are flawed. If Congress were to adopt any of the proposals for reducing interchange rates, "merchants would benefit from lower interchange fees. Consumers would also benefit if merchants reduced prices for goods and services, but identifying such savings would be difficult," according to the report. "Consumers also might face higher card-use costs if issuers raised other fees or interest rates to compensate for lost interchange-fee income." Such tepid conclusions seem unlikely to strongly sway the bitter debate between merchants and payments companies that has intensified this fall as Congress considers three bills to regulate interchange. The Credit Card Accountability, Responsibility and Disclosure Act President Obama signed into law in May required the GAO to conduct the study. Both sides of the debate had eagerly awaited the report, hoping it would provide them ammunition. And after the study came out, both sides were quick to claim victory. Mallory Duncan, senior vice president and general counsel of National Retail Federation, said in a press release the report "confirms what we have been saying about swipe fees for years, that they drive up costs for consumers and are a cash cow for banks." The Electronic Payments Coalition unsurprisingly had a different takeaway: "Today's GAO study on interchange states that consumers could be harmed if Congress acts to lower what merchants pay to accept debit and credit" cards.
