Washington D.C. The National Retail Federation (NRF) is urging the House Judiciary Committee to support anti-trust legislation that would require Visa and MasterCard to negotiate with merchants over credit-card processing fees. NRF said that the hidden fee charged by the two card giants is projected to cost the average U.S. family more than $400 this year. A hearing on the matter is scheduled for Thursday.
“If consumers knew how much they are actually paying for credit cards, most would say they aren’t worth the price,” NRF senior VP and general counsel Mallory Duncan said. “U.S. consumers are paying an outrageously high annual fee that most don’t even know about, and the price is going up dramatically every year.”
According to NRF estimates, the average U.S. family is projected to pay $427 in hidden credit-card interchange fees in 2008. The figure is based on the $48 billion Visa, MasterCard and their banks are projected to collect in interchange during 2008. This is divided by the U.S. Census Bureau’s estimate of 112.4 million households. The number is up from $378 in 2007, and has nearly tripled from the $159 paid in 2001, the year NRF began tracking interchange.
Sponsored by committee Chairman John Conyers, D-Mich., the bill would require credit-card systems possessing “substantial market power” to negotiate with merchants to reach a voluntary agreement on credit-card terms and conditions.
If an agreement cannot be reached, both sides would be required to submit their final offers to binding arbitration by a three-judge panel appointed by the Department of Justice and Federal Trade Commission.