Electronic Payments Coalition

4 ways to know if a merchant is charging a fee for credit card transactions

admin — Fri, 17 May 2013 19:14:38 +0000

Consumer advocates are reminding shoppers to look out for merchants that impose credit card surcharges.

Merchants must meet certain requirements if they impose a surcharge on credit card purchases:

• Retailers must post a notice at the entrance of their stores and at the point of sale.

• The retailer has to disclose the surcharge percentage and explain the fact that the charge is being imposed by the retailer (not the credit card company) and does not exceed the amount the retailer pays to accept credit cards.

• Receipts need to show the dollar amount of the surcharge.

• Online merchants must alert consumers that a surcharge will be imposed on the webpage where credit cards are first mentioned.

“The rule of thumb is this – you can’t gouge your customers, and you can’t hide the fees,” said Trish Wexler, spokeswoman for the Electronic Payments Coalition, which represents banking and financial institutions, including Visa and MasterCard.

The Durbin Amendment Turns Three

admin — Fri, 17 May 2013 19:10:25 +0000

The amendment prevented banks from charging more than 24 cents per debit card transaction. Before Durbin, banks were charging roughly 44 cents per debit card transaction. In the aftermath of the market crash, congressional leaders thought that this price cap would help struggling consumers.

Consequently, champions of the Durbin Amendment declared a victory for the American people. However, AFP opposed the Durbin Amendment. The victory for consumers was falsely proclaimed. Durbin’s amendment was actually a boon to retail companies who wanted the government to force debit card transaction costs downward. This did not change the real price of debit card transactions—that remained at 44 cents. Instead, it artificially lowered the price, leaving banks with a loss of 20 cents per transaction.

The illegal debit card fees that just won’t die

admin — Fri, 17 May 2013 19:08:01 +0000

Some gas stations, convenience stores and other merchants are illegally charging fees for debit card users, as well as putting minimum purchase amounts on customers who use the bank cards, according to a new report. A January settlement of a class-action lawsuit allowed merchants to start adding “checkout fees” on customers who pay with credit cards, but it exempted debit card users. Despite this, some merchants still hit debit card users, GoBankingRates.com reports.

So what should you do if you’ve been charged an illegal fee? If you live in one of those states that outlaw credit card processing fees, Visa encourages you to report the retailer to your state attorney general’s office.

Consumers hit with minimum purchases or surcharges on debit cards should also call the customer service number on the back of their cards, the report says. That’s because banks that issue the cards will report violations to Visa or MasterCard.

Richmond Fed’s Economic Quarterly Explores Interchange Fee Regulations and the Durbin Amendment

admin — Wed, 08 May 2013 20:23:53 +0000

The debit card interchange fee regulation introduced by the Durbin Amendment to the Dodd-Frank Act went into effect in October 2011. The regulation limits the maximum permissible interchange fee that a covered issuer can collect from merchants for a debit card transaction. In this issue of Economic Quarterly, Richmond Fed economist Zhu Wang reviews the regulation’s first-year impact on different players in the debit card market. Specifically, he highlights the unintended consequences on small-ticket sales. The rising interchange fee on small-ticket sales could affect a large number of transactions. According to the 2010 Federal Reserve Payments Study, in 2009 debit cards were used for 4.9 billion transactions below $5, and 10.8 billion transactions between $5.$15. The former accounts for 8.3 percent of all payment card transactions (including credit, debit, and prepaid cards), and the latter accounts for 18.3 percent. Since merchants may have different compositions of transaction sizes, they could be affected differently by the changes … Continue reading →

Swipe-Fee Settlement Objectors Spared Contempt Finding

admin — Fri, 03 May 2013 20:06:30 +0000

U.S. District Judge John Gleeson in Brooklyn, New York, today said he would “give the benefit of the doubt” to trade associations opposing the agreement and told them they should better police the websites for misstatements.

“I think there’s a powerful incentive for the objectors to be sure they’re not basing their argument on ground that’s not so firm,” Gleeson said.

Gleeson said on April 11 that the sites contained “bad information” that may have persuaded some merchants to drop out of the settlement and he ordered the groups to make corrections. One of the sites, Merchantsobject.com, continued to “obfuscate” key points as of April 24, the judge said in a written order that day.

Judge threatens trade groups with contempt in card-fee pact

admin — Fri, 26 Apr 2013 17:40:18 +0000

A federal judge has taken the unusual step of threatening to hold retail trade groups in contempt for a website urging merchants to reject a proposed $7.2 billion settlement with Visa Inc and Mastercard Inc over credit card fees.

Federal Judge Threatens to Hold Merchant Trade Groups in Contempt Over Swipe-Fee Websites

admin — Wed, 24 Apr 2013 17:42:30 +0000

A federal judge overseeing a pending $7.25 billion class-action settlement involving Visa Inc. (V) and MasterCard Inc. (MA) ordered merchant trade groups opposed to the deal to show why they should not be held in contempt over a website blasting the accord.

Keep Congress, courts away from credit cards

admin — Tue, 16 Apr 2013 15:59:37 +0000

By leaving interchange fees to be negotiated in the marketplace, the settlement maximizes competition among credit-card processors, banks and retailers. Consumers reap the benefits of that competition in the form of lower prices and better services.

Judge in U.S. credit-card fees case assails critics’ website

admin — Thu, 11 Apr 2013 15:15:45 +0000

A U.S. judge on Thursday scolded retail trade groups for creating websites urging millions of fellow merchants to reject a proposed $7.2 billion settlement with Visa Inc and Mastercard Inc over credit card fees.

U.S. District Judge John Gleeson singled out the merchantsobject.com website of the National Association of Convenience Stores (NACS), which tells merchants to “take action” and says their options are to “opt out” or “object.”

He said the wording of the websites could prompt merchants to think that accepting a settlement was not an option.

“It’s not fair,” Gleeson said during a 15-minute hearing in Brooklyn federal court prompted by a complaint from the lead class counsel for a proposed class of 8 million merchants. “It’s completely misleading.”

He gave the lawyers for pro- and anti-settlement retailers one week to submit proposals on appropriate relief. He said he would not order the sites be taken down but would be willing to consider such relief as a website banner telling visitors that he had found information previously posted to be misleading

Judge Orders Merchant Trade Groups To Correct Swipe-Fee Websites

admin — Thu, 11 Apr 2013 15:12:37 +0000

A federal judge on Thursday ordered merchant trade groups to correct information on websites intended to drum up retailer opposition to a multi-billion-dollar class-action settlement with Visa Inc., MasterCard Inc. and several large banks.

At a hearing in U.S. District Court in Brooklyn, Judge John Gleeson said the groups in question, which are plaintiffs in suits against the payment networks, must add a banner to their websites stating that Judge Gleeson has determined prior information on the sites to be misleading, according to people who attended the hearing. They must also include a link to a court-approved website with information about the settlement.