OKLAHOMA CITY – With Circle K’s credit card interchange fees petition well underway, consumers are paying attention — and so are the card companies.
According to NewsOK.com, the petition drive in Oklahoma City-area Circle K stores is encouraging customers to ask Congress to change the way retailers pay interchange fees for accepting credit cards. Lynda Gromek, operations director at Circle K, told the news source that the fees are the company’s second-largest cost, trailing only payroll.
"It’s not negotiable from our perspective,” Gromek said, adding that the amount of the fees also is difficult to determine.
The card companies, however, are saying that merchants are more interested in passing the fees onto their customers, and even making a claim that retailers have a seat at the table to negotiate a lower rate.
Trish Wexler, a spokeswoman for the Electronic Payments Coalition, which represents the card industry and their member banks, said the claims being made by Circle K (and all convenience stores) are false. "I don’t buy their argument whatsoever,” she said, adding that “merchants can negotiate with credit card issuers, but ‘the vast majority’ of those retailers choose a non-negotiated default rate,” writes the news source.
"They don’t want to pay this default rate — they want to pay less,” Wexler said. "But you don’t go to Congress to say ‘help me pay less.’ If they’re not paying for it, who’s going to pay for it?”
It might be cheaper for a merchant to give away a low-priced item like a candy bar rather than sell it to someone paying with a credit card, a representative of convenience stores said Wednesday.
Lyle Beckwith, senior vice president of government relations at NACS, told the news source that this is not true; that only a fraction of the fees can be negotiated, and determining how much each transaction costs is nearly impossible.
And in some cases, “flat fees charged on nearly every transaction could be more that the cost of the item being sold,” he told the news source.
By the end of the petition drive, Circle K hopes to deliver nearly 750,000 customer signatures to Congress.
Doug Kantor of the Merchants Payments Coalition commented to the new source that three bills have been introduced in Congress that would “make the process more transparent, and would create a more competitive market among credit card issuers.”
Meanwhile, Beckwith added that many countries have reined in interchange "swipe” fees via legislation, negotiation or the threat of litigation.
"The U.S. currently pays the highest interchange rates in the industrialized world; three to four times what are being paid in some other countries,” Beckwith said.
Fortunately, the issue has not fallen on deaf ears, as Congress has mandated that the Government Accountability Office examine interchange rates as part of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act (PL 111-24), which was signed into law on May 22. The GAO report is due to Congress by the end of 2010.
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