By: Hannah Walker, Director of Government Relations, Food Marketing Institute

This week, the U.S. House of Representatives Small Business Committee held a hearing on EMV migration and the challenges small businesses are facing under the liability shift deadline. When the House Small Business Committee announced it would hold a hearing with Visa, the Electronic Transactions Association, a bank and a credit union, FMI, like many other merchant trade associations, expressed concern that the hearing lacked a voice for merchants. We have since been assured that the committee is planning a hearing on October 21 to represent all merchants, and FMI will feature a grocer witness.

In the meantime, we needed the members of Congress who sit on the committee to be the voice for small businesses and ask the panel some tough questions. Our hard work paid off when committee Ranking Member Nydia Velázquez (D-NY) used her opportunity to question the panel to ask Visa about its interchange fees, specifically if Visa would lower interchange fees if a reduction in fraud occurred as a result of the EMV shift. The Visa witness would not promise to reduce interchange and went on to defend the card network’s pricing, saying its fees are competitive to attract both bank issuer business and merchant acceptance.


Unfortunately, anyone in retail who accepts credit cards knows that the card brands are not competing for your business. American consumers and merchants pay more than $50 billion a year in interchange fees, over 60 percent of the interchange paid globally. Merchants historically have not had any negotiating power with the card networks, instead they have been faced with the option to take it or leave it.

Conversely, the card brands compete with each other to get banks to issue their cards, and a large part of their attraction is higher revenue in the form of interchange. So the Visa witness’s comment that the card network prices its products competitively was half true; they do compete upwards to get banks to issue the cards, but I think we can all agree her comment of competing for merchant business can be labeled as fiction. There is no competition among the card brands to lower interchange to entice merchants to accept their cards. 

As your federal lobbyist at FMI handling swipe fees, I would like to send out a huge thank you to all of our members who have engaged in the interchange fight over the years. We continue to bring your message of the broken market and unfair credit card fees to Congress. It is little wins like this that remind us, fighting the broken credit card system is a marathon merchants can win, we just have to keep vigilant and stay in the game.

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