SOME MERCHANTS claim they can’t do business without credit cards, and can’t discount for cash. That’s why we were interested in your recent article about a Boston merchant who cuts the price of sushi by 55 percent on Sundays for customers who pay cash to avoid the fee of about 2 percent she pays to accept credit cards (“Taking a swipe at card processing fees,"
Is this really about cash discounts or about a practice followed by some sushi vendors who cut prices by half on Sunday to make room for fresh fish on Monday? Dec. 12, Metro, B1).
Says Shawn:
"Merchants’ lobbyists want consumers to believe they will benefit if Congress regulates the fee of about 2 cents on a dollar merchants pay for the benefits they get by accepting credit cards: they outsource their credit risk to the banks that issue the cards and are responsible if customers default; they get protection from fraud and theft; guaranteed payment, and efficient record keeping. Plus higher sales, as consumers aren’t constrained by the amount of cash they have in their wallet.
If merchants don’t pay their fair share, consumers get hurt. Like any other valuable service, electronic payments have a cost. Today, those costs are split between the two key beneficiaries - merchants and cardholders. If merchants get their way and persuade Congress to regulate their share, consumers will pay more. That happened in Australia, where the government regulated these fees. Consumers there now pay more for their cards through higher annual fees, fewer benefits, and sometimes, surcharges when they choose to use their cards. Merchants pocketed the savings, as there is no evidence that they have cut the prices they charge.
SHAWN MILES
Purchase, N.Y.
The writer is head of global public policy forMasterCard .
