WASHINGTON - For merchants, accepting credit cards has always brought with it a sense of mystery €" they never know what swipe fees they will have to pay for processing that transaction. The Merchants Payments Coalition (MPC) has unveiled a new document that shows how MasterCard and Visa have worked with big banks on price-fixing those fees.

Even though banks set their own prices on every other fee and rate they charge, they each agree to charge the same swipe fees in concert with Visa or MasterCard. The Merchants Payments Coalition (MPC) said that while banks complain that merchants might show consumers how large these fees are (and decry it as surcharging), the financial firms continue to hide their swipe fee price-fixing scheme.

"Visa and MasterCard have a stranglehold on the market. They set the fees in secret and banks all charge the same thing rather than competing on price," said Doug Kantor, MPC counsel. "If they price-fixed consumer fees they would probably go to jail, but because the fee is charged to businesses and hidden they have managed to get away with it."

Swipe fees, which have tripled in the past decade, are the charges credit card companies set and banks levy on merchants for accepting their credit cards. These fees are the fastest-growing expense that merchants face (rising faster than health care costs) and are merchants€™ second-highest operating fee after labor costs. These fees can be as high as 4% of the customer€™s bill €" the highest swipe fees paid in any country in the industrialized world.

Merchants don€™t know what the fee will be when a customer swipes a credit card until they get their bank statement. There more than 240 different fees, depending upon the type of card and the merchant accepting it. The banks that issue cards are Visa and MasterCard's customers, not the consumers who use the cards. Under the current system, Visa and MasterCard are motivated to keep banks happy, not consumers.

Merchants paid banks more than $30 billion last year in credit card swipe fees €" money that could have been used to create jobs and lower prices. If Congress would step in and stop the price fixing, U.S. consumers could benefit from reduced swipe fees, as in Europe where they are eight times lower.