How Credit Card Reform Impacts What’s Next in Payments

I was recently quoted in a Business Week article on October 29th, “Interchange Fees Make Strange Bedfellows” by Brian Burnsed.

Here’s an excerpt:

In the latest round of credit-card reforms, issuers and retailers are both playing the consumer-friendly angle. Currently lawmakers are debating whether to cut interchange fees, the tab that merchants pay to card issuers each time a customer uses plastic. While retailers claim they would pass the savings on to shoppers in the form of lower prices, card companies argue the legislation will make credit less convenient and more costly—and they may be right.


Merchants have long complained about interchange fees. They say the costs, which amount to roughly 1.6% of every transaction, erode already razor-thin margins. Last year retailers, the main supporters of three bills now working their way through Congress, forked over an estimated $48 billion in card fees. “We can’t keep absorbing these fees,” Kathy Miller, a grocery store owner in Elmore, Vt., testified at a congressional hearing in early October.

In their quest to win over lawmakers, retailers maintain consumers won’t get hurt—and may actually benefit. “Our market is extraordinarily competitive,” says Mallory B. Duncan, general counsel of the National Retail Federation, a trade group. “If costs go down, that tends to drive down prices.” That’s not what happened…


Take a look at the article and let us know how YOU think interchange fees and credit card reform will impact what’s next in payments.