Credit card move paves way for lower charges to retailers

23-Jun-2008

Credit card move paves way for lower charges to retailers

Operators should be able to negotiate lower credit card fees after MasterCard suspended its Multilateral Interchange Fee last week

MasterCard has suspended its Multilateral Interchange Fee (MIF) from June 21 , paving the way for renegotiations that could reduce the fees paid by travel-retailers to the credit card company. The MIF is a cross-border fee agreed between the card holder and retailer’s banks which the retailer must pay without negotiation . It is believed to account for up to 80% of the merchant charge.

The suspension is the culmination of several years of hard work by the travel-retail Fair Payment Alliance (FPA), which has successfully argued that these fees are non-negotiable, untransparent and anti-competitive. The FPA is advising all operators accepting MasterCard consumer payment cards to contact their acquiring banks to renegotiate fees in order to reflect the suspension of the MIF. Retailers have been urged to contact the FPA if banks are unwilling to negotiate lower rates or need advice on issues relating to MasterCard’s MIF.

FPA head Jacques Parson said: “This is a historic moment for all of us involved in the FPA and marks the start of a more competitive environment with the card companies and banks for the benefit of retailers and their customers. Our work is not yet complete and we stand ready to work with the European Commission in its latest investigation into Visa.”

Source

http://www.dfnionline.com/article/Credit-card-move-paves-way-for-lower-charges-to-retailers-1856861.html