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Despite $1 Billion Annual Subsidy for Gas Retailers, Consumers Seeing No Relief at the Pump This Summer
Despite $1 Billion Annual Subsidy for Gas Retailers, Consumers Seeing No Relief at the Pump This Summer Payment Networks Voluntarily Capped Charges, But Retailers Pocketed Windfall Profits Washington, DC – July 9, 2014 – This year, Americans head into the first weeks of summer facing average retail gasoline prices of $3.67 per gallon. Unfortunately, despite the strain that these high prices place on consumers, there is still no evidence that gas retailers are passing on any of the $1 billion annual subsidy they receive from the Durbin amendment on to consumers in the form of lower prices. “Retailers convinced Congress to lower debit interchange fees by promising they would pass the savings onto consumers yet there’s no evidence consumers are seeing lower prices,” said Jeff Tassey, Executive Director of the Electronic Payments Coalition. “Likewise, Payment Networks voluntarily capped the fees that they charge gas retailers on fuel transactions in the hope … Continue reading
Electronic Payments Coalition Issues Statement on the Need for Collaboration on Data Security Solutions
The Electronic Payments Coalition issued the following statement regarding recent merchant data breaches and the security of the electronic payments system: Over the last month, as many as 100 million Americans have had the unfortunate experience of learning that their personal information was compromised in a series of recent retailer data breaches. While some have tried to use this criminal activity as an opportunity to score political points and refight old battles, all participants must instead commit to further strengthening the system as a whole. The electronic payments system brings extensive benefits to consumers, retailers and financial institutions, including fast, secure and reliable transactions, but these recent merchant breaches are a reminder that the work to protect consumer information is never done. Data security is a rapidly changing and complex issue, and solutions require dedicated collaboration. All parties – retailers, networks, processors, financial institutions and others – must come together … Continue reading
Electronic Payments Coalition Issues Statement on National Retail Federation Interchange Settlement Appeal
After nearly a decade of negotiations, the court has determined that this settlement is in the best interest of all parties involved. This is simply a political ploy by a few big box retailers – for whom enough is never enough – that disregards the millions of retailers who are supportive of the settlement. These same tired arguments were raised over and over during the negotiations and would have been included in the final terms if they had any merit.
Today, the U.S. District Court for the Eastern District of New York approved a settlement in the long-running legal dispute between retailers, payment networks and nine major card issuers over interchange fees and rules. The Electronic Payments Coalition issued the following statement: “The long political conflict over interchange fees is finally over, settled by a well-established legal process, which brought together retailers and the card industry for a negotiated resolution. After years of mediation, dozens of meetings, and millions of pages of evidence, the parties involved have willingly agreed to settle their dispute. “This settlement is in the best interest of all involved parties and that has been proven today with the court’s final approval.”
University of Chicago Law School Analysis Finds Consumers Will Lose $22 Billion as a Result of the Durbin amendment Nearly three years after the implementation of the Durbin amendment, consumers have yet to see the savings that retailers promised. Instead, they are paying the same or higher prices for goods and services and more in consumer banking costs. An analysis by University of Chicago Law School economists David S. Evans, Howard Chang, and Steven Joyce entitled “The Impact of the U.S. Debit Card Interchange Fee Regulation on Consumer Welfare: An Event Study Analysis” quantifies just how much consumers are expected to lose, rather than gain, from The Durbin amendment. The paper analyzes stock prices to determine the impact to consumers from the Durbin Amendment. The analysis finds that retailers gained a $7 billion yearly windfall starting in 2011 as a result of the Durbin amendment. At the same time, consumers … Continue reading
The Federal Reserve Bank of Richmond published the report “Debit Card Interchange Fee Regulation: Some Assessments and Considerations” in the third quarter 2012 issue of Economic Quarterly. The report analyzes the debit card interchange fee regulation introduced by the Durbin amendment and its first-year impact on different players in the debit card market. The report specifically notes the unintended consequences of the Durbin amendment on small-ticket sales and rising bank fees.
The survey found that 72 percent of credit union checking accounts remain free and 39 percent of bank checking accounts remain free. The article notes that one reason for the difference may be that most credit unions aren’t subject to the Durbin amendment, which has resulted in a loss of revenue for many institutions. The author explains that checking account fees have been used as a way to make up for those revenue losses.
Earlier this week, the National Retail Federation distributed a false and misleading statement to the press. Attached please find the correct information, along with links to the accompanying documentation to prove their validity.
On November 9, 2012, U.S. District Court Judge Gleeson (New York, Eastern District) granted Preliminary Approval of the merchant interchange settlement. In the following interview, Robert Stolebarger, partner at Bryan Cave LLP and antitrust counsel for the Electronic Payments Coalition, addresses some of the most commonly asked questions about this ruling and what it means.
The Honorable Judge John Gleeson of the U.S. District Court for the Eastern District of New York granted preliminary approval of the landmark settlement agreement between retailers, payment networks and nine major card issuers, over merchant interchange fees. The settlement was originally announced on July 13th after several years of litigation. The preliminary approval of this historic settlement will almost immediately give retailers the many benefits they demanded. Sixty days from November 9, 2012, the card networks will implement rule changes. Merchants will now have the ability to add checkout fees (a retailer surcharge) at the register and form buying groups.