WASHINGTON – Interchange fees on credit cards add 5 cents to every gallon of gasoline sold, wrote Scott Harmon, president and CEO of CHR Corp., which operates Rutter's Farm Stores, in a Washington Times op-ed on Friday. Here is an excerpt of that opinion piece.
“In Washington, many ideas are being touted to alleviate consumers' pain at the gas pump; suggestions range from temporarily cutting the federal gas tax to ending additions to the strategic petroleum reserve. The highly touted, proposed three-month temporary reduction in the 18.4 cent federal gasoline tax would amount to an annualized tax savings for Americans of 4.6 cents per gallon. As politicians argue the alternatives, there is one obvious way being overlooked: Reduce the outrageous credit card fees that are a growing part of each fill-up. These are nothing more than another gas ‘tax.’
“A way to provide permanent relief from this tax is offered by the Credit Card Fair Fee Act, a bill sitting in Congress that could cut 5 cents from the price of every gallon. The act targets the fees merchants pay on every credit card transaction. Called ‘interchange’ in the credit industry, these fees are skyrocketing. …
“The Credit Card Fair Fee Act is all about requiring the credit card company monopoly, Visa and MasterCard, to simply negotiate with merchants the fees they charge. …
“This is not a fight pitting big business against big business, but a struggle in which small corner stores are trying to control the fees they are charged by the world's largest financial institutions. My family has been a part of the convenience store industry for three generations. Our industry consists primarily of mom-and-pop proprietors — 62 percent of stores are owned by a single-store operator. …
“Meanwhile, Visa and MasterCard are recognized by U.S. courts as a bank-owned and operated monopoly because they control 73 percent of transactions and 85 percent of the cards issued in this country. …
“It is no secret the credit card industry drops significant cash on Capitol Hill to maintain the monopoly status quo. The American Bankers Association — which represents Visa, MasterCard and their member banks — put $1.7 million into congressional pockets in 2007. To date, only 30 representatives have had the guts to say ‘no’ to bankers and support the bipartisan Credit Card Fair Fee Act.
“I sat in Sen. Arlen Specter's office recently as merchants and bankers explained credit card monopoly pricing to him. Those of us who are merchants pleaded for his support of the act. … Three months have passed and we are still waiting for Mr. Specter's decision on this important legislation.
“I ask every voting American to contact their representative and senators and ask for their support of the Credit Card Fair Fee Act. When it passes, we might all permanently save 5 cents a gallon on gas while maintaining a federal gas tax that will rebuild our country's infrastructure and keep our strategic oil reserves intact.”