So which is it? Do consumers agree that merchants are getting gouged by interchange fees, or do they think the system is just fine? Do they even care?

Several reports issued last week seemed to back, variously, every one of those positions. They came as interchange is gaining attention as a possible topic in the next wave of credit card regulation.

Card companies and issuers have long said interchange fees are needed to pay for their networks and offset risk. Merchants, by contrast, are increasingly challenging the system, arguing that the fees are too high, especially for low-value transactions.

A survey released last week by Visa Inc. said that, despite merchants' best efforts to get consumers to rally to them and against the payment companies, people are happy enough with the status quo.

A July survey of 1,000 adult consumers by Fabrizio, McLaughlin & Associates said 83% of respondents believed that, if interchange fees were trimmed, the savings would not be shared with them by merchants. And 78% said that retailers get enough benefits from card acceptance to justify the costs.

"Consumers understand that merchants pay to accept cards … ; while they may not understand all the terminology that the industry uses, they understand there is value," Bill Sheedy, Visa's group president for the Americas, said in an interview Friday.

Trish Wexler, a spokeswoman for the Electronic Payments Coalition, a Washington payment industry trade group, said that if interchange were cut significantly, consumers would not only not save money on purchases but also probably pay more to issuers.

"There's just no question in my mind that consumers will end up paying for this," she said. If interchange were forced down, "banks and credit unions are facing an impossible position — to either raise fees so they can continue offering cards or to stop offering cards altogether. Those are the options."

For their part, merchants continue to push the idea that they are paying too much for interchange.

Another report released last week, by the Merchants Payments Coalition, a Washington trade group, argued against interchange, which it characterized as a "cash cow" for banks and a burden on merchants.

The retailer group argued that interchange rates in the United States average 2%, higher than in any other country, and that cutting them would be "a boon to our economy and would benefit both merchants and their customers."

Jennifer Hatcher, the group vice president for government relations at the Food Marketing Institute, a member of the merchant coalition, said that interchange is "the only cost that's not controllable" by merchants.

They have ways of keeping their electricity bills down, she said, but interchange costs are largely driven by how customers choose to pay.

Hatcher argued that consumers are sympathetic to merchants' concerns.

Bruce Cundiff, a director of payments research and consulting at Javelin Strategy and Research, said that merchants are asking for too much. "The merchant lobby, I don't think they let their foot off the gas, ever," he said. "They're never going to be satisfied until it costs zero to accept credit cards. That's just not feasible."

Congressmen John Conyers and Peter Welch have introduced separate bills this year addressing interchange and other card acceptance issues.

The more recent attention, Wexler said, is because "the merchants are putting more money into a campaign right now, probably hoping to take advantage of the atmosphere today."

Avivah Litan, a vice president and distinguished analyst at the Stamford, Conn., market research company Gartner Inc., said even the most aggressive merchant campaigns against interchange may prove fruitless. "From a consumer's point of view, they don't care, and the retailers haven't done a very good job of lobbying," she said.

Still, there is merit in some retailer claims, she said.

"Interchange is supposed to be a mechanism to balance the needs of all parties in the food chain … , but there is no transparency in how it is set," Litan said. "The truth is, the volume of transactions is going up, and if the fraud is going down, as they say … , interchange fees should be coming down."

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