Technology/Services

Boxing Day

7-Eleven's rally showcases "Stop Unfair Credit-Card Fee" petitions, legislation
WASHINGTON -- House lawmakers are poised to debate legislation that aims to limit the interchange fees that credit-card companies exact on transactions at retail stores, reported The Hill. TheHouse Financial Services Committeewill hold a hearing on the bill on Thursday, it said. Representatives Peter Welch (D-Vt.) and Zoe Lofgren (D-Calif.) have sponsored legislation aimed at clamping down on interchange fees. Welch appeared at a rally on the issue on Wednesday with [image-nocss] a group of 7-Eleven store operators and the National Association of Convenience Stores (NACS).

On September 30, 7-Eleven CEO Joe DePinto, members of the 7-Eleven senior team, field consultants and franchisees and national coalition of 7-Eleven franchisees went to Washington and delivered to members of Congress approximately 130 boxes with more than 1.66 million signatures to raise awareness of the issue of unfair credit-card fees. They held a press conference and rally in Upper Senate Park on Capitol Hill, calling for Congress to pass interchange reform. (Click here to view photos of the event.)Several franchisees joined DePinto to ask Congress to help end "unfair and excessive" credit-card fees. "We want to bring to the attention of Congress that we have an unfair credit-card fee, and banks will not let us sit down and negotiate," Mark Chiochankitmun told The Washington Times. He has operated a 7-Eleven store in Washington for 30 years. "Each year, store owners spend about $25,000 to $45,000 a year in fees. President Obama and Congress work to protect consumers from credit-card companies and overlook the merchant. We just want to bring the credit-card company to the table."

Store owners want the ability to negotiate the price of the interchange fees they are charged by banks each time a customer uses a credit card. Officials at 7-Eleven say interchange fees totaled $48 billion in 2008.

But MasterCard officials say consumers were poorly informed about the information they signed. "We conducted a survey and survey results indicated that the petition was misleading," Shawn Miles, leader of MasterCard's Global Public Policy Group, told the newspaper. "Three in four consumers surveyed said they would oppose legislation once they understood that it would cost them more through higher fees to use their payment cards. The survey also found that three-quarters of respondents believe the fees merchants pay for accepting credit cards are just a cost of doing business, and that merchants should pay those fees," he said.

"If a customer pays for a [$1] newspaper with a credit card, the merchant pays about 20 cents in fees," Chiochankitmun said. "That does not seem like a lot, but over months and years it adds up. Ten years ago, not many people used a credit card at a convenience store. Today, 10 times as many people use a credit card."

Hank Armour, president of the National Association of Convenience Stores (NACS), also participated in the press conference. (Click here andhere to view more photos of the event.)

The interchange fee issue is one of the most heavily lobbied financial matters on Capitol Hill and pits retailers and other store lobbyists against many of the largest financial-industry interests.

"The big-box retailers, hiding behind some of the convenience store folks, want to use the electronic payment system for free, which is ridiculous when they get higher sales, convenience from having to deal with cash, guaranteed payment for their services and products, and all the risk associated with credit cards gets passed onto the financial institutions," Dan Berger, executive vice president of the National Association of Federal Credit Unions (NAFCU), told The Hill.

Visa released itssurvey as evidence that consumers believe stores benefit more by allowing credit-card transactions than they pay to card companies.

Click here for previous CSP Daily News coverage.

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