Beware government intervention
Sometime in the very near future, the card industry needs to urge that the acquirers, the issuers, Visa Inc., and MasterCard Worldwide will negotiate and control the interchange issue, or it will hurt all parties substantially. Please leave the legislative bodies out of this!
Interchange is the only revenue stream for issuers in allowing debit cards to be used at the point of sale, and if that stops, a very large chunk of cardholders will not be available to visit the merchant base. ... Legislators simply support the thing that appears to be popular and presently that is "bashing banks."
Bill Shaw
First Citizens Bank
Bill,
Thank you for sharing your thoughts. The escalating interest and actions on the part of both state and federal law-makers to legislate interchange, including the so-called Durbin Amendment currently under consideration by the U.S. Congress, are of great concern to our readers.
We hope that all who have a stake in this issue make their voices heard in the halls of governments across the land.
Editor
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From GS Online's MLS Forum The premier online network for payment pros GS Online's MLS Forum thread titled "Does Tricky Dicky Durbin want the Feds to seize Visa/MC?" has been lively since forum member ZAYETS started it on June 10, 2010. So lively, in fact, that it has sparked a grassroots call for a "National Cash Only Day" over Labor Day weekend, Sept. 4 to 6. The idea evolved over the course of a discussion about Sen. Durbin's motives for proposing the Federal Reserve be given authority to set interchange for debit transactions, how legislation could lead to a decrease in retailers' sales because consumers would end up with fewer, more costly payment options as a result of their having to pay the merchants' share of the cost of bankcard acceptance, and the need to emphasize the great value merchants receive from accepting electronic payments. CREDITCARDMN got the activist ball rolling by reporting that sometimes he pays cash for gas inside at rush hour. "I am timing how long I tie up that pump, not allowing another customer to use it, and how much time of the cashier," he wrote. "Figuring a labor cost of about $11.32 per hour, which is about what a $9.50 an hour employee costs, I am tracking what the extra expense is for me to buy gas. On average it takes an extra 4 minutes and 20 seconds. This makes the cost per minute about 19 cents, or about 82 cents additional labor cost, not counting the lost sales in a rush hour time of about six transactions." "Maybe those lobbyists at the ETA and NRF would find it very interesting to see your numbers," CLEARENT replied. Soon, talk turned to possible actions forum members could take. Thus the cash-only plan was hatched. FASTTRANSACT volunteered to get things moving on Facebook. "OK, let's plan this out," she wrote. "It will have to be through viral marketing. We get on the social networks like Facebook and make a 'cause' for National Pay Everything by Cash Day. Then we all 'friend' it and send it out to our 'friends' list. They join the cause. What we need is a clear synopsis as to why we want everyone to stop using their credit and debit cards for one day or week. It would be a great way for all consumers to send a message to the merchants and the government about the power we actually have." Will this fly? It may be up to you. To get involved, visit www.causes.com/causes/495235/about. |
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