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US: Swipe fees back in spotlight as retailers boycott Apple Pay

By  |  October 27, 2014

As news emerged over the weekend that retail giants Rite Aid and CVS have decided not to accept mobile payment system Apple Pay in their stores, reports say Apple’s new product will likely reinvigorate retailers’ war against interchange fees.

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    Apple Pay, which officially launched on October 20, promotes itself as one of the most secure payment systems. Experts say it will likely become popular with consumers, but the fees charged to retailers for each transaction will not be taken likely with stores.

    Since 1996 a group of major retailers including Walmart and Sears have combated such interchange fees through a class action against Visa and MasterCard, arguing that the swipe-fees harm competition. The credit card companies agreed to a $3 billion settlement in 2003, but litigation is ongoing as the Federal Reserve Board issued a cap on swipe-fees that some say was higher than intended when Congress set out to curb the transaction costs.

    The ongoing conflict, some experts say, is likely to be exacerbated by Apple Pay and retailers’ blocking of the payment service. CVS and Rite Aid are both part of the Merchant Customer Exchange, which includes 58 of the nation’s largest retailers – including Walmart and Swears. Reports say MCX is preparing to launch its own competition to Apple Pay, known as CurrentC.

    Full content: Computer World

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