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Interchange interference hits small merchants--CU
WASHINGTON (4/16/09)—A former chapter director of the Massachusetts Credit Union League told the Boston Herald this week that government intervention in interchange fees would disproportionately harm the nation’s small businesses. Citing conclusions by the Small Business and Entrepreneurship Council, Nicole James said in a letter to the editor that if the government lowers the fees, it would result in lower sales and increased costs for merchants, especially smaller ones. At issue are the fees charged merchants by credit card companies each time a consumer uses the card for a purchase. Opponents of government regulation argue that the fees assist the growth of universal acceptance of cards and the innovation of super-fast authorization technology and enhanced security measures. James, who is president/CEO of MAFCU FCU, Brookline, Mass., was responding in her April 14 letter to a local merchant who complained interchange fees represented “undue profiteering.” She wrote that interchange revenue is gauged, in part, to cover the risk taken on for a transaction and protection from fraud. “If we were not able to cover these costs, we'd be forced to either raise prices for our members or stop offering credit products altogether,” she wrote. Small business owners and elected officials “should not be fooled by the lobbying campaign by big-box retailers who don't want to pay their fair share of the electronic payments system that serves them so well,” James argued.


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