Credit Card Fees - H.R. 2695 and S. 1212

NACS retail members cite credit card fees as their second largest store-level operating expense, behind only labor. In 2008, the convenience and petroleum retailing industry reported a pre-tax profit of $5.2 billion and an astounding $8.4 billion paid in credit card fees. At the motor fuel dispenser, credit card fees are often greater than the profit a retailer earns on each gallon sold. The largest component of these fees is interchange, a fee charged by the cardholder's bank to the retailer's bank and passed on to the retailer. Across all industries, in 2001, Visa, MasterCard and their issuing banks collected $16.6 billion in credit card interchange fees. By 2008, these fees increased to $48 billion – more than the total amount of penalty fees and ATM fees combined. Interchange fees are far higher than the actual processing costs and risks involved, yet these transactions fees continue to rise.

NACS is fully supporting the Credit Card Fair Fee Act (HR 2965/S 1212), which will begin to address the anticompetitive nature of fees charged to retailers by credit card companies by leveling the playing field and encouraging negotiation between the parties. Currently convenience and petroleum retailers have no ability to negotiate our credit card interchange fees that we pay on credit card transactions. The Credit Card Fair Fee Act is not an attempt at regulating the industry and does not mandate any particular outcome. This legislation simply enhances competition by allowing retailers to negotiate with the dominant banks for the terms and rates of the fees.