The Wall Street Journal reports that small businesses and retailers are rebelling against increased fees being imposed by Visa and MasterCard on customer transactions.
“Merchants swallow the per-transaction ‘interchange’ fees they fork over when customers pay by plastic because they chalk it up to the price of doing business in a credit-card world,” the WSJ reports. “But now they are incurring increasingly higher fees for certain trendy cards that give affluent consumers an array of perks -- from an early chance to score hot concert tickets to snagging reservations at a popular restaurant.”
The WSJ notes that Visa and MasterCard say “the new rates are justified because consumers who use the premium cards tend to spend more, which in turn benefits the merchants.”
Smaller merchants and independent businesses dispute that, and say they are less able than their larger brethren to absorb the higher costs.
“Merchants swallow the per-transaction ‘interchange’ fees they fork over when customers pay by plastic because they chalk it up to the price of doing business in a credit-card world,” the WSJ reports. “But now they are incurring increasingly higher fees for certain trendy cards that give affluent consumers an array of perks -- from an early chance to score hot concert tickets to snagging reservations at a popular restaurant.”
The WSJ notes that Visa and MasterCard say “the new rates are justified because consumers who use the premium cards tend to spend more, which in turn benefits the merchants.”
Smaller merchants and independent businesses dispute that, and say they are less able than their larger brethren to absorb the higher costs.
- KC's View:
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Retailers ought to band together to inform consumers about the costs being imposed by the credit card companies, informing them that higher transaction costs can translate to higher prices.
We’re always amused when retailers (not supermarkets, for the most part) take debit cards that have MasterCard and Visa logos on them, but don’t take PIN-based debit cards…even though the PIN-based cards have much lower fees. It doesn’t make sense…and they have only themselves to blame for not offering the cheaper alternative.
