Comments on: Interchange regulation – H.R. 5546

By: The Merchant Account Blog » Credit card interchange vote tomorrow

The Merchant Account Blog » Credit card interchange vote tomorrow — Tue, 31 Mar 2009 14:11:17 +0000

[...] to the surprise of the merchant account industry, the congressional bill proposing to regulate interchange, is being attached to the credit reform act and is potentially being voted on tomorrow. Although [...]

By: Dat To

Dat To — Fri, 26 Dec 2008 22:18:45 +0000

Your site is has amazing information. This is an incredibly complex industry and you are right about not regulating interchange rates. If the government steps in and regulates interchange, then every other fee will go up to make up for it. Band aid solutions. Every time the government tries to ‘solve’ something it creates another program with another budget that never disappears even if it doesn’t work and actually creates a whole new set of problems. I have empathy for Josh’s situation- these stories are true and rampant. Ridiculous. What if people like you and other ethical ISOs put their heads together for practical solutions that would work?

By: Josh N.

Josh N. — Thu, 16 Oct 2008 00:37:13 +0000

I work for a resort sales company which has approx 1/3 of its incoming cash from credit card transactions. The latest issue we have with merchant account services is that they say we have had too much business through our card systems and thus the risk is too high and they immediately begin collecting a reserve, ours is now at $500,000. They can hold this reserve for the life of our business relationship with them, it can continue to go up depending on the risk they assess with no additional objective transparent guidelines and they can hold this money up till 270 days after we end the relationship. They have collected anywhere between 100% down to 20% of reciepts until they have reached that number. We have a company that employs 300 people and it is the cash reserves that are killing us, not the other credit crunch or the interchange fees.

By: Aubrey Clark

Aubrey Clark — Wed, 13 Aug 2008 02:04:36 +0000

Maybe a compromise? The bill should only allow the brand names i.e. Mastercard, Visa, and Discover, to charge an interchange fee and mandate that this fee be shown on the transaction receipt. Then, prohibit the card issuers (the banks) from charging any “processing fees” on the retail transaction. This will force the banks to pass along their processing costs and profits directly to the consumers in the form of a fee that is printed clearly on their statement. By doing this, consumers will see exactly what their credit card usage costs them. Once banks are forced to show the hidden fees, this will create competition between the banks which will help lower fees for credit card customers.