By Keith Reid
The Wall Street Journal reported on February 14 that insiders indicated that in April Visa and MasterCard are going to increase interchange fees for merchant banks. It would be expected that the merchant banks will pass those increases along to merchants. So far, details are lacking.
As retailers in the convenience store industry know, interchange fees have been a long-running and significant issue that has been fought aggressively by industry associations for at least a decade. These fees represent a significant cost of doing business and are virtually inescapable for any merchant that wants to accept credit— and therefore stay in business.
It is interesting how both Visa and MasterCard claim they are not a monopoly. And yet, they both came to this decision at the same time. You could see unity among competitors on issues like EMV and other interrelated operational concerns. Those types of issues are worked through by associations made up of true competitors all the time. However, in a competitive relationship one of these two “competitors” might have decided that not raising fees would give a competitive advantage in the marketplace. But then, when was the last time anyone saw Visa or MasterCard actually run an aggressive advertising campaign against the other?
When is the FTC going to wake up?