I would have assumed that, even during an era when bankers aren’t pariahs, the typical news story about credit card interchange fees would be heavily slanted against the greedy banks that charge them, and would inevitably contain sympathetic profiles of the mom-and-pop retailers that the banks exploit.
Wrong! Oh, Andrew Martin’s retailers-vs.-the-banks piece on interchange in Friday’s New York Times has the obligatory thumbnails of downtrodden merchants. But it’s shockingly even-handed, just the same:
[R]etailers may have a tough time convincing Congress that consumers would benefit if the effective interchange rate, which has increased slightly in recent years, is dialed back. Many other countries, including Israel and Australia, have required banks that issue cards to reduce the fee. Yet there is little evidence that the savings were passed along.
In Australia, where regulators required banks to cut the interchange rate for Visa and MasterCard purchases to 0.5 percent from 0.95 percent, the banks offset their loss by reducing rewards programs and raising annual fees, according to a 2008 report by the Government Accountability Office.
A similar outcome could happen here, banks and card companies say. In response to 7-Eleven’s petition drive, MasterCard said the convenience store chain was really asking its customers “to claim that they want to pay more for their payment cards so 7-Eleven can increase its profits.”
A more succinct summary of the banks’ point of view I can’t imagine. . . .