Peter Guidi's Blog

Consumers and credit card fees; Love em’ or hate em’, which is it? It depends on who you ask!

In Uncategorized on September 25, 2009 at 5:43 pm

The battle for the hearts and souls of the American consumers, or more accurately their wallets heated up again this week with the release of conflicting reports. In one corner Visa released a survey that found shoppers are generally happy with they way things are today.  Most respondents felt that even if card acceptance fees where lowered the merchant would not pass those saving on. In the other corner we have the retail industry being lead by the Merchant Payments Coalition and supported by a July 2008 study that found 3 out of 4 Americans support legislation to reform interchange fees.

What’s the Congress to do? Given the mood in Washington, legislation controlling everything from profits, pay and bonuses seem to be up for congressional review. Why not interchange fees? 

One point to remember, as R. A. Butler said; “In politics you must always keep running with the pack. The moment that you falter and they sense that you are injured, the rest will turn on you like wolves”. In other words, if the industry asks for interchange fees to be controlled; how far behind are limits on gas sales profits?

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  1. Its really a question of who do you trust more? I don’t really believe that the retailers would pass on the savings to the consumer. However, at this point I’d say that I’d much rather see the money going into the retailers pockets than into the banks. Banks have just done so much to consumers that they have a really negative vibe going in the minds of most people. I’m not all that thrilled with the idea of feeding the big mega retailers like Wal-Mart, but to see the little mom and pop operations making a bigger chunk of change would be fine by me. Those small businesses would also reinvest the money into the community a whole lot more which would in turn stimulate the local economy.

    Is legislation needed though is a dicey question? Oftentimes I think the government sticks its head where it doesn’t need to be. The other option is to just let a tug of war play out between banks and retailers and see who caves first. Unfortunately the ramifications for the consumers during that tug of war might be pretty bad. It should be interesting to see how this plays out.

    Check out my blog on the interchange fee battle at…. http://www.thedebtgazette.com/2009/09/cardfees-retailer-war/

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