Apr 19, 2006

Protesters demonstrate against interchange fees

The whole interchange battle is getting really bizarre.

This was news a couple months ago, but I just saw this picture and found it bizarre enough to post it now. The photo was taken outside the Javits Center during the National Retail Federation's annual conference in New York, showing protestors demonstrating against interchange fees. The demonstration was organized by a group called StopInterchangeNow.com and the photo was posted on the WayTooHigh.com credit card interchange blog.

The slogans on the signs include:

"Visa: Everywhere You Want a Fee"

"American Express: My Life. My Card. My Fee."

"MasterCard. Not Priceless"

Merchants around the world are angry about having to pay fees which they feel are much higher than banks' cost of operating the networks. Merchants know that banks use a large part of their interchange revenue to pay for mileage programs, loyalty points and other rewards currencies, and they are angry about that. Merchant associations, central bankers, consumer advocacy groups and competition watchdogs are increasingly asking why merchants should be financing banks' rewards programs through interchange fees. This is a growing, global risk that is huge, which lots of banks have not really focused on yet. In financial terms, the risk is an order of magnitude greater than the fraud risks that currently consume 100% of the EMV industry's efforts and focus.

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