Under pressure from retailers, trade groups and lawmakers, Visa U.S.A. has posted U.S. interchange rates on its web site. But the Merchants Payments Coalition says retailers still need more explanation of how the rates are set and applied.
Under pressure from retailers, trade groups and lawmakers, Visa U.S.A. has posted U.S. interchange rates on its web site. It follows in the footsteps of MasterCard Worldwide, which announced last month it will begin posting U.S. interchange rates on its site beginning Nov. 1.
But the Merchants Payments Coalition says the release of the rates shows the need for more explanation of how the rates are set and applied. “The report shows a bewildering array of rates for different cards, merchants and types of transactions, which emphasizes the opacity of interchange,” Mallory Duncan, coalition chairman and senior vice president and general counsel at the National Retail Federation, said in a statement issued yesterday. “Without the operating rules that govern how these fees are applied, this announcement falls far short of the disclosure that is required and that Visa promised in testimony before Congress this summer.”
Interchange is the fee collected by merchant banks and acquirers and passed on to card issuers. It accounts for about 80% of the discount rate retailers pay for card acceptance, according to the MPC, and considered to be the floor below which discount rates cannot go. Previously, the card associations released interchange rate schedules only to merchant banks, issuers and acquirers.
In announcing the posting of the interchange rates, Rhonda Bentz, Visa vice president, said the association is “providing more clarity into the Visa system than is seen in any other retail environment.”
But Duncan says that “Visa and MasterCard need to fulfill the promises they made in testimony to the Senate Judiciary Committee to provide their full operating rules.”
The Merchant Payments Coalition is a group of 20 trade associations representing online merchants, retailers, restaurants, supermarkets, drug stores, convenience stores, gas stations and other businesses.