Dive Brief:

• In reaction to Mastercard and Visa saying they'll postpone a planned increase on some interchange 'swipe' fees next month, the National Retail Federation (NRF), representing 16,000 members, said it's pleased the companies delayed their plans, but urged that the hike be "canceled altogether."
• The Merchants Payments Coalition (MPC), another group of retailers, restaurants, gas stations and other merchants focused on the credit card fee issue, took the argument a step further, calling on Visa and Mastercard to lower their fees.
• Both trade groups signaled they're interested in federal legislation to address what they call the credit card companies' unbridled power to increase fees, echoing sentiments made by a top Senate lawmaker last week.

Dive Insight:

The groups estimate the increase would have added about $1.2 billion in annual expense for retailers and other merchants. Currently, the fees average about 2.25% on every transaction, with the businesses generally passing those costs onto consumers.

The credit card companies had previously planned to increase the fees last year, but held off because of the COVID-19 pandemic and its impact on the economy. Any increase this year still would have been ill-timed because of the pandemic's continuing toll, the merchant trade groups argued. 

The two retail trade groups contended in separate statements Visa and Mastercard have too much market power to increase fees. "The way these fees are set shows how Visa and Mastercard's market power allows them to charge more than any free and open market would bear," said Doug Kantor, a public policy attorney for the MPC at the law firm Steptoe & Johnson in Washington. "Rather than just delaying an increase, they need to lower these fees and encourage the banks that issue their cards to embrace competition and transparency."

The two organizations suggested they're pressing for legislation to address the issue. We look forward to working with lawmakers as they address this issue this year," NRF said in its statement.

Millions, if not billions, of dollars are at stake. Processing fees paid by merchants when they accepted credit card payments jumped to $116.4 billion in 2019, up 88% over the prior decade, NRF said.

Such a campaign would carry on a battle between the two sides that has been waged for more than a decade. The credit card companies' fight with the retail and merchant interest groups reaches back prior to passage of the Durbin Amendment, sponsored by Sen. Dick Durbin, D-IL, in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act to cap debit card fees.

Before the two credit card companies said this week that they'd postpone their increase, Durbin signaled last week that he was willing to take on the companies again. Durbin became Senate Majority Whip and chairman of the Senate Judiciary Committee when the Democrats regained control of the Senate this year. At a congressional hearing on antitrust issues, he called the pair a "duopoly" and signaled he might be willing to take action. "Where is the policing authority to stop this duopoly from doing this to every merchant retailer in America," he said.

The Food Industry Association in a statement also applauded the credit card companies' move to postpone the fee increases, but stopped short of calling for the kind of legislative response that the other two groups proposed. 

The credit card companies didn't have any statements today beyond their comments earlier this week on their decision to delay increasing some fees until next year.