Regulation

The Next Round Of Lobbying Battles Over Swipe Fees Is Starting

The next round of fights over credit card fees looks like it is gearing up to begin in Washington as Walmart and other retailers are joining forces with credit card processors in an attempt to push lawmakers and regulators to give them a seat at the table when it comes to setting standards for card security and new payments tech.

“We want a seat at the table,” said Doug Kantor, a lobbyist at Steptoe & Johnson who is leading the new group, called Secure Payments Partnership. “We are not looking to start another fight — but if that’s what happens, then that’s what happens.”

Retailers and processors argue that though they are strongly affected by the $90 million or so paid annually for cards, they do not have enough say in how those fees are assessed. They also argue that only the networks like Visa and Mastercard are in the driver’s seat when it comes to things like who pays when cards are stolen.

Financial firms counter that retailers and tech companies do have representatives who weigh in on rules for credit cards, and this is yet another end run around paying the much-hated swipe fees.

“All players in the payments ecosystem — including retailers — have the opportunity to provide feedback and participate in the process,” said Jeff Tassey, chairman of Electronic Payments Coalition, whose members include networks like Visa and banks like JPMorgan Chase & Co.

“While some industries lobbying Washington for further regulation seem to be more interested in cutting their own costs than protecting their customers from fraud, the payments industry is fully committed to providing security and innovation for all participants,” Tassey said.

As consumers continue to migrate online and towards mobile phones, retailers and financial firms have battled over who should be in control of the new technologies and systems to thwart fraud as well as the interchange fees that are charged every time a card is used.  All systems of payment — swipe, tape, buy button or one of the “…” Pays — must adopt the systemic standards set.  Currently, that choice is made by the several councils run by the card networks.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our April 2019 Unattended Retail Report. 

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