The New Zealand Competition Commission reportedly has reached an agreement with Visa there that will bring greater interchange fee transparency to consumers and retailers, a move that has been lauded by the Retail Industry Leaders Association (RILA) in the US.
“American retailers and consumers deserve the same fair treatment that Visa now offers in New Zealand,” says John Emling, senior vice president for government affairs at RILA.
According to the release issued by New Zealand’s Competition Commission, the settlement with Visa will ensure that:
• Credit card issuers will now be able to set the interchange rates individually that will apply to transactions using their credit cards, subject to maximum rates determined by Visa. These rates will be publicly available.
• Merchants will no longer be prevented from applying surcharges to payments made by credit cards or by specific types of credit cards. Merchants will also be able to encourage customers to pay by other means.
• Visa has confirmed that non-bank organizations or companies that might wish to provide acquiring services to merchants are permitted to join the Visa network as acquirers if they meet relevant financial and prudential criteria.
Interchange fees, which are imposed by the card association and banks to process the credit and debit card transactions, are said to have tripled in the United States since 2001 to $48 billion last year and RILA, along with other trade associations, charges that amount to a hidden tax on consumers.
“Regulators around the world have closely scrutinized anti-competitive practices related to interchange fees by Visa, MasterCard and other card associations and have come to the realization that these fees are bad for consumers and retailers,” says Emling. “US regulators must follow suit to prevent these credit card giants from continuing to impose soaring costs on retailers small and large.”
“American retailers and consumers deserve the same fair treatment that Visa now offers in New Zealand,” says John Emling, senior vice president for government affairs at RILA.
According to the release issued by New Zealand’s Competition Commission, the settlement with Visa will ensure that:
• Credit card issuers will now be able to set the interchange rates individually that will apply to transactions using their credit cards, subject to maximum rates determined by Visa. These rates will be publicly available.
• Merchants will no longer be prevented from applying surcharges to payments made by credit cards or by specific types of credit cards. Merchants will also be able to encourage customers to pay by other means.
• Visa has confirmed that non-bank organizations or companies that might wish to provide acquiring services to merchants are permitted to join the Visa network as acquirers if they meet relevant financial and prudential criteria.
Interchange fees, which are imposed by the card association and banks to process the credit and debit card transactions, are said to have tripled in the United States since 2001 to $48 billion last year and RILA, along with other trade associations, charges that amount to a hidden tax on consumers.
“Regulators around the world have closely scrutinized anti-competitive practices related to interchange fees by Visa, MasterCard and other card associations and have come to the realization that these fees are bad for consumers and retailers,” says Emling. “US regulators must follow suit to prevent these credit card giants from continuing to impose soaring costs on retailers small and large.”
- KC's View:
- I suspect that the goings-on in New Zealand won’t change Visa’s intransigence here in the US. But one can hope.
