Thursday
Sep172009
Americans Paid $48 Billion In Swipe Fees In 2008 Alone, Says New Report
Thursday, September 17, 2009 at 4:10PM
A new report released by the Merchants Payment Coalition says American consumers and businesses pay far higher credit card “swipe fees” than counterparts in other countries in the industrialized world.
Hank Armour, President and CEO of National Association of Convenience Stores, said Americans pay swipe fees rates are more than double those in the U.K. and New Zealand, four times those in Australia, and more than six times those in cross-border rates in the European Union.
“As a result, American households pay about $427 a year in hidden swipe fees,” Armour said.
Armour also said that while other countries around the world have taken steps to rein in unfair hidden fees, American businesses and their customers paid $48 billion in swipe fees in 2008 alone, which is triple the amount since 2001.
“Their sleight of hand would make Houdini proud,” Doug Kantor, of Merchants Payment Coalition, said.
Kantor pointed to New Zealand as one country that has taken action. He said they prohibit the banks from charging the same fees as each other so that they have some competition, and they allow consumers to get information about those fees and for merchants to give customers discounts when they pay through cheaper means.
Mallory Duncan, Senior Vice President of the National Retail Federation, said computing power has driven down costs dramatically and the cost of processing has dropped as well.
“Nevertheless, swipe fees continue to climb. Over the last decade they’ve continued to risen an average 16 percent per year. Even health care has not been climbing at 16 percent compounded annual growth rate,” Duncan said.
Kantor said VISA and Mastercard control 85 percent of the market. Both also have what is called market power, which means they can control the market from a price perspective and offer zero ability to negotiate with them.
Hank Armour, President and CEO of National Association of Convenience Stores, said Americans pay swipe fees rates are more than double those in the U.K. and New Zealand, four times those in Australia, and more than six times those in cross-border rates in the European Union.
“As a result, American households pay about $427 a year in hidden swipe fees,” Armour said.
Armour also said that while other countries around the world have taken steps to rein in unfair hidden fees, American businesses and their customers paid $48 billion in swipe fees in 2008 alone, which is triple the amount since 2001.
“Their sleight of hand would make Houdini proud,” Doug Kantor, of Merchants Payment Coalition, said.
Kantor pointed to New Zealand as one country that has taken action. He said they prohibit the banks from charging the same fees as each other so that they have some competition, and they allow consumers to get information about those fees and for merchants to give customers discounts when they pay through cheaper means.
Mallory Duncan, Senior Vice President of the National Retail Federation, said computing power has driven down costs dramatically and the cost of processing has dropped as well.
“Nevertheless, swipe fees continue to climb. Over the last decade they’ve continued to risen an average 16 percent per year. Even health care has not been climbing at 16 percent compounded annual growth rate,” Duncan said.
Kantor said VISA and Mastercard control 85 percent of the market. Both also have what is called market power, which means they can control the market from a price perspective and offer zero ability to negotiate with them.
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