In 2005, American consumers sent more than $30 billion to Visa, Mastercard, and the banks that back their credit and debit cards through interchange fees – a process one advocacy group says is purposefully kept secret.
“Few consumers know about interchange fees because Mastercard and Visa wrote the rules that make it virtually impossible to tell consumers how much interchange fees cost them,” according to the Merchants Payments Coalition’s www.unfaircreditcardfees.com Web site.
The coalition says interchange fees average 2 percent of every credit and debit retail purchase, and drive up the cost for goods and services purchased by all consumers, whether they pay with cash or plastic.
Could the fees have sparked the recent dispute between Flying J Inc. and Visa?
The Flying J has had signs posted for weeks at locations across the country stating truck pumps wouldn’t accept pre-payment by Visa credit or debit cards beginning on Friday, May 25.
Virginia Parker, Flying J spokeswoman, didn’t immediately respond to a phone call and e-mail sent by Land Line Magazine Friday, May 25.
In the January 2006 edition of Land Line, however, Parker said the company’s own bank backs a Flying J debit card that allows drivers to get cash prices compared with higher prices for other credit card companies.
“We’re charged a fee to process other bankcards, so you don’t receive the same benefit as when you use our card,” Parker said back in 2006.
The interchange fees have hurt smaller fuel retailers which already operate on small margins due to taxes and competition.
The National Association of Convenience Stores estimates individual fuel retailers lose an average of 2.75 percent of the sale price for every gallon sold because of to credit card and bank processing fees.
The Towne Market Mobile gas station in Mequon, WI, shut its pumps down Thursday in a one-day protest of high gas prices meant to demonstrate the power frustrated consumers have with oil companies, according to the Associated Press.
Station owners posted a sign that read “a message must be sent to those involved with this situation.”
– By Charlie Morasch, staff writer