Meet the “Interchange”: You’re paying it and the banks are profiting from it

You may have never heard of “interchange” fees, but you’re paying them. A lot of them. And, right now, you and merchants around the country have absolutely no control over that. These fees are a huge moneymaker for banks and credit card companies -– approximately $48 billion last year alone.


Interchange fees are a way for credit card companies and their banks to get rich quick, while passing the bill on to the America’s consumer. Interchange fees are charged to merchants every time a credit or debit card is used to pay for a purchase. These hidden fees can be anywhere from 1 – 4%, and they’re on top of interest and all the other fees that actually show up on a credit card statement. It’s like a hidden sales tax, but, a sales tax over which no one has any input or knowledge. Imagine the outrage if states arbitrarily tried to raise sales tax 1 – 4%, without any warning, especially in this economy? But that’s what banks and credit card companies are being allowed to do right now, in secret.


Earlier today, the Merchants Payments Coalition (, a group comprised of convenience stores and other merchants announced the launch of an aggressive media and grassroots campaign to rein in unfair and hidden “interchange” fees. The group wants an open and transparent system for implementing these fees. The fees are based on the outdated model that credit card companies needed money to process credit card bills and receipts by snail mail. Now, only a small percentage of the fee covers the cost. The rest finances junk mail and bank profits. But, the banking lobby has successfully prevented any changes – so far.


The coalition has launched an ad campaign targeting members of the House Financial Services Committee, which is examining credit card legislation this week. The targets include a couple of first-termers: Reps. Bill Foster (D-Ill.), Jim Gerlach (R-Pa.), Jim Himes (D-Conn.), Paul Hodes (D-N.H.), Dan Maffei (D-N.Y.), Walt Minnick (D-Idaho) and Shelly Moore Capito (R-W.Va.). They're also doing an ad praising Senator Dodd for his work on the issue.


The campaign’s paid advertising is focused in the Districts of at those seven key House members and includes a six-figure advertising buy comprised of radio, print, online, and television spots calling on them to support legislation to rein in interchange fees.


In addition, thousands of merchants, who are struggling to hold off greedy big banks and rising unfair hidden credit card fees, have begun a grassroots effort to contact their Members of Congress to give small business and consumers a helping hand in this economy.


The banking industry has already run roughshod over the American economy with very little accountability. The interchange is another example – and it has to change.