Convenience-store operators this month are launching a fresh campaign for interchange-rate reform with an interactive, animated Web video designed to explain to consumers how credit and debit card interchange fees hurt them economically.
The National Association of Convenience Stores earlier this month began circulating its video through its members’ Web sites, and the organization this spring plans to run banner ads on other Web sites touting the video.
The Web video encourages viewers to click on animated, interactive buttons with sound effects that explain how much “swipe fees” cost convenience-store operators when consumers buy a bag of chips, $20 in gas or other generic types of purchases.
The video pegs merchant transaction fees at about 2% of the sale; interchange represents “80% to 90%” of the swipe fees the video describes, a spokesperson for the association says. Consumers in 2008 paid $48 billion in credit card interchange fees passed along by merchants through the prices they set for their products and services, the Alexandria, Va.-based association says.
“Visa and MasterCard are charging huge, hidden and skyrocketing swipe fees for declining card rewards and services,” the video explains. “It’s a great business model for them, but it hurts American consumers, especially during a recession.”
The video urges consumers to fill out an online form formatted to send an e-mail message automatically to elected officials using any of several different provided “talking points.” It also urges consumers to visit a specially designed Web site, www.fightswipefees.com.
Lawmakers last year pushed two bills to regulate interchange that did not advance to a full congressional vote, including one that would require banks to enter into collective-bargaining agreements with retailers to set interchange rates. Another would enable merchants to introduce surcharges on credit and debit cards to offset the higher cost of such transactions.
7-Eleven Inc. last year tried to rally consumer support when it gathered 1.6 million consumer signatures supporting interchange-rate legislation. MasterCard carped that its own research showed that 7-Eleven misled consumers into thinking a reduction in interchange rates would directly benefit them (see story).
The American Bankers Association considers interchange a business-to-business issue and points to a government study that suggests it would be difficult to quantify savings that retailers might pass on to consumers if interchange rates were reduced (see story).
And earlier this year, House Financial Services Committee Chairman Barney Frank, D-Mass., told attendees at a gathering of credit-union executives that interchange-rate legislation is “not on the agenda for 2010” because of a logjam of other financial-services issues (see story).
But the convenience-store association remains optimistic that interchange-rate legislation will resurface this year in Congress.
“There is a lot of activity happening at the local level, and we understand there are plans to schedule hearings on interchange-rate regulation this year,” Lyle Beckwith, the association’s senior vice president of government relations, tells PaymentsSource. “Retailers are not going away on this issue. We will continue to push until it’s resolved.”