Retailers Seeking to Negotiate Credit Card Rates with the Banks October 16, 2009

Photo by WVPress

The debate over retailers’ credit card interchange fees has spurred on several studies on the feasibility of lowering the rates and allowing the retailers to negotiate their fees with the banks.

President Obama requested a study of the fees in May when he signed new legislation about banking fees.

The Merchants Payments Coalition is studying the effects of lowering the rates in Australia, Canada, New Zealand, and the European countries. They want the right to negotiate fees with the banks. The Merchants Payment Coalition, headquartered in Washington, D.C., is a group of merchants and other businesses representing 2.7 million stores and 50 million employees. The group does not support the interchange fees which merchants pay, saying they are excessive and a “threat to open markets and free competition.” They have also made an appeal to consumers to support their cause.

Representative Peter Welch is investigating the idea of setting minimum and maximum amounts for credit card purchases.

These debates are taking place because of the effects of the economic crisis on the retailers and small businesses. The issue of negotiating rates with the banks has been a long standing issue with small businesses.