2008 LEGISLATIVE AGENDA

Interchange Fees

Retail Council position

Support legislation that would require credit card processors and issuing banks to disclose conspicuously all fees charged to retailers in conjunction with credit or debit transactions at the point of sale.

Legislative action

The Senate and Assembly in 2007 introduced one-house measures that would require credit card processors to furnish merchants with credit and debit card rules and fee schedules.  S.5035-A (Fuschillo) was referred to the Senate Rules committee and A.7775-A (Brodsky) was held in the Assembly Consumer Affairs committee.

At a glance

  • Interchange fees, which are imposed by financial institutions issuing credit or debit cards, have increased exponentially over the past few years as banks and processors continue to charge retailers exorbitant fees to process credit cards as a method of payment.  The increased volume in credit card transactions, coupled with fee increases, translates into a windfall for acquirers and a bottom-line blow for retailers throughout New York and across the country.
  • Despite the crippling effect interchange fees have on retailers’ balance sheets, acquirers continue to mask the true costs associated with accepting credit and debit cards by disclosing only an abbreviated summary of interchange fee schedules.  This practice fosters and promotes an uncompetitive marketplace, leaving retailers blind to fees associated with individual cards and unable to make informed choices as to which cards they should accept or decline at the point of sale.  
  • Efforts on the federal level to reform the way interchange fees are assessed continue to move at a glacial pace, at best.  While the New York State-specific measures listed above in no way change the interchange fee structures, the disclosure provisions included are a positive and constructive first step to changing the way acquirers do business. 
  • Legislation forcing processors to be transparent in the fees charged to merchants is fair and increasingly necessary as small and large retailers absorb these costs with no real understanding of how the fees are assessed per credit card transaction.  The Retail Council will continue talks with sponsors of the aforementioned bills and voice support for the measures to the entire legislature in 2008.