As the U.S. looks at regulating interchange fees at the behest of some retail groups, this March 21, 2006 DigTrannews piece encourages policymakers and legislators to review a new study that shows “an increasing number of merchants in Australia -- which three years ago introduced regulation of the fees merchants pay acquirers on card payments -- are planning to levy surcharges on credit card transactions. Among the 500 largest companies surveyed, 19.4% said they planned to surcharge within the next six months, up from 16.5% that reported such plans six months ago. Meanwhile, 16.6% of mid-size businesses said they planned to assess a surcharge, up from 12.2%, and 14% of small-to-medium businesses said they’d surcharge, up from 11.9%. The study, which covered 2,200 companies, was released by East and Partners, a research firm. No figures were immediately available on the amount of surcharge merchants were contemplating.”
The article continues: “As reported today in various Australian press accounts, regulators had not expected merchants to follow through with consumer charges, thinking this would drive away business. But now, these reports say, an increasing number of merchants see the levies as a revenue opportunity. At the same time, the Australian Consumers Association has reacted to the latest survey results by saying the increase in the number of merchants intending to surcharge exposes a ‘potential weakness’ in regulators’ efforts to control card pricing, according to these press accounts.”
Oops -- that’s code for more regulation.
Here’s more, as we predicted, from the article: “The interchange regulation has already led to other consequences not necessarily foreseen three years ago, including increasing fees paid by cardholders to issuing banks. This additional levy had amounted to $139 million (U.S.) by late last summer (Digital Transactions News, Aug. 12, 2005).”
As a U.S. House member said at a recent House Commerce Committee hearing on the issue of Interchange fees: “Be careful what you wish for, you just may get it”…and more.
Karen Kerrigan
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