As you already know from multiple NACS Daily stories, the Senate Judiciary Committee held a hearing on Wednesday, July 19, into the issue of credit card interchange fees. From the merchants’ perspective, the hearing was a resounding success. The witnesses representing Visa and MasterCard were on the defensive from the beginning trying to explain why there is nothing wrong with the collusive and secretive manner by which their member banks set interchange rates and did not in any way violate antitrust laws. The members of the committee seemed unconvinced because of one primary factor: you.

In their opening statements, Chairman Arlen Specter (R-PA), Sens. Patrick Leahy (D-VT), Chuck Grassley (R-IA) and Dick Durbin (D-IL) commented how many of their constituents had met with them to discuss the problems with credit card interchange fees. From these contacts with business owners in their states, these senators proceeded to ask the representatives of the card associations why they make the interchange system so complicated for retailers, why they place so many restrictions on retailer activities and why they remain so secretive about their operating rules.

NACS lobbyists have helped educate these senators and their staff regarding the complexities of this issue, but their line of questioning was a direct result of conversations they have had with individuals back home. By communicating your concerns about the issue to your legislators, you helped lay the groundwork for what was perhaps the most dramatic development of the hearing: Visa promised to provide the committee with a copy of its operating rules.

You may recall that Visa announced its intention to provide retailers with access to the complete set of operating rules provided retailers signed a non-disclosure agreement. When told of this, Chairman Specter asked Visa to provide the committee with a copy of the rules. When he confirmed they would be delivered, Specter announced that he would then share the rules with Steve Cannon, an attorney testifying on behalf of the Merchants Payments Coalition (MPC). This is clearly not something the card associations expected and it provides a great opportunity for retailers.

So, what comes next? Sen. Durbin expressed concern that the hearing would represent the end of the committee’s interest in this issue, to which the chairman responded it most certainly would not. From NACS perspective, it is essential that retailers continue to express their frustration with interchange fees at every possible opportunity. The level of interest in Washington, DC, on this issue is extremely high and it is the responsibility of all of us (associations and retailers) to maintain that interest and push forward with the issue.

NACS staff will continue to cooperate with other MPC members to educate members of Congress and their staff about the importance of this issue and we ask all retailers to continue talking with your legislators about the negative affect credit card interchange is having on your business and your customers. Through such commitment, we can continue to make progress and identify a solution that will benefit merchants and consumers alike.

Have a great weekend!
John Eichberger
Vice President, Government Relations