CONTACT:
Jennifer Mullin (Harkin) 202-224-3254John Gentzel (Snowe) 202-224-8667
Sue Walitsky (Cardin) 202-224-4524
Harkin, Snowe, Cardin Ask GAO to Investigate Interchange Fees
WASHINGTON D.C. – U.S. Senate Small Business and Entrepreneurship Committee Members Tom Harkin (D-Iowa), Olympia J. Snowe (R-Maine), and Benjamin L. Cardin (D-Maryland) today requested that the Government Accountability Office (GAO) investigate the structure of credit card interchange fees, which are used to reimburse credit card companies for processing transactions. While credit card companies contend that consumers and businesses receive great benefits from the current system, merchants are concerned that card issuers are pushing the cost of credit card incentives and rewards programs onto businesses and consumers through interchange fees. To examine both sides of the issue, the Senators asked GAO to take a balanced look at whether fees are properly disclosed, how the fees are set, and the level of competition in the marketplace.“This multi-billion dollar fee is blamed for higher grocery prices and credited for subsidizing popular cash-back and rewards cards,” Senator Harkin said. “A GAO study will help us to gather unbiased information on these fees so that we can help the average consumers who are in the middle of this tug of war. I trust the GAO to honestly and comprehensively study this issue and advise us on a fair way forward.”
“While the credit card companies assert that they are helping consumers purchase goods and services, merchants, many of which are small businesses, say the interchange fees charged are too high, not set competitively, and eat into already slim profit margins,” said Senator Snowe, Ranking Member of the Senate Small Business and Entrepreneurship Committee. “To get to the bottom of this dispute, we’re asking GAO to look at the facts and assess whether credit card interchange fees are set in a transparent manner in accordance with market principles. I look forward to reviewing GAO’s recommendations to determine whether legislation is necessary to address this issue.”
“Interchange fees constitute significant surcharges which are passed on to Maryland businesses and consumers,” said Senator Cardin. “We need a balanced review to determine if merchants have appropriate bargaining power to negotiate fair and reasonable rates with companies like Visa and MasterCard, who control the majority of the market. Greater transparency, negotiation, and competition can only be of help to the credit and debit payment system.”
