Credit Card Companies to Small Business: Drop Dead

by: waterbury_indie

Thu Apr 19, 2007 at 10:01:18 AM EDT

Sen. Chris Dodd, January 25:

I would like to put the credit card industry,  issuing banks and card associations on notice.  If you currently engage in any business practice that you would be ashamed to discuss before this Committee, I would strongly encourage you to cease and desist that practice.

Nashville Business Journal, April 15:

Bankers, however, say the fees are the cost of doing business and benefit retailers.

"They are shifting the payment risk and collection cost to somebody else," says Tim Amos, senior vice president and general counsel for the Tennessee Bankers Association.

Retailers, he adds, have options.

They can shop for competing credit card processing companies or pass the cost on to their customers.

On April 10, Steve Kirkham, owner of Kingston-based Rocky Top Markets, told Tennessee legislators his credit card fees reached $130,000 in March. In April 2001, he paid $27,000.

"They are making more on a gallon of gas than I am," Kirkham told the Senate Commerce Committee.

In addition to the rising rates, retailers argue that more customers are using credit cards to combat the increasing gasoline prices, which further increases their costs.

About 70 percent of Kirkham's sales are done with credit cards compared to 45 percent five years ago, he says.

Is this new? Hardly -- ConsumerAffairs.com June, 2005:

"Merchants have little or no ability to negotiate with Visa and MasterCard for lower interchange fees, and these fees are a 'hidden tax' that raise prices paid by consumers for almost every product they buy," says attorney K. Craig Wildfang, representing the plaintiffs. "Visa, MasterCard and the banks now have the burden of proving that they have set the interchange fees at the correct competitive level. Even Visa's own economists admit that they cannot satisfy this burden."

So what are we waiting for? C'mon, Congress. Let's see some action on this front.