Here’s something you don’t read very often; an opinion defending the application and level of interchange fees charged to merchants to process card transactions. A column in Forbes lays out the argument that it is interchange that creates a secure, inclusive, and dynamic payment network that supports a significant portion of general commerce, particularly for consumers.
Here’s an excerpt from the article, written by Jeffrey Tassey, Chairman of the Board of the Electronic Payments Coalition:
As the payments industry, as well as those of us who support it, responds to this paradigm shift, the need for reliability and security has never been more important. Interchange fees — a transaction fee merchants pay when a customer uses a debit or credit card to make a purchase from their store — play a significant role in supporting the system that allows consumers to shop at their favorite retailers safely and seamlessly. Interchange is driven by the balance between the value merchants receive for accepting cards and the cost of products required to meet consumer expectations as cardholders.
While many merchants understand the value of electronic payments and accept these fees as a cost of doing business, some merchant trade associations argue that interchange is too high and that the system has practices that restrict competition. It’s true that many merchants have a challenging business model for which fees can be an issue, but they still derive significant net value from accepting electronic payments over other forms of payment.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
