Retailers Testify on Interchange Rates

WASHINGTON -- Two grocers testified yesterday before the Senate Judiciary Committee at a hearing about whether current policies for setting credit card interchange rates are a violation of federal antitrust laws, and should be addressed by Congress.

Bill Douglass, c.e.o. of Douglass Distributing in Sherman, Texas; and Kathy Miller, owner of the Elmore Store in Lake Elmore, Vt., spoke about the effect of the interchange fee system on their businesses. Douglass testified on behalf of the National Association of Convenience Stores, while Miller represented the Food Marketing Institute.

Both organizations are members of the executive committee of the Merchants Payments Coalition, which was formed last year to address increasing interchange fees. It is a coalition of about 20 trade associations representing retailers, restaurants, supermarkets, drug stores, convenience stores, gas stations, online merchants, and other businesses that accept debit and credit cards.

MPC is fighting for a more competitive and transparent card system that it says will work better for consumers and merchants alike. The coalition's member associations collectively represent about 2.7 million stores with around 50 million employees.

Antitrust attorney W. Stephen Cannon, currently president of the New York and Washington-based law firm Constantine Cannon, also testified on behalf of the MPC before the Senate. "The collective setting of interchange fees represents ongoing antitrust violations by the two leading payment card associations -- Visa and MasterCard -- that cost merchants and American consumers tens of billions of dollars annually," he said in a statement. "Hidden from consumers, these fees are in addition to the late fees, over-limit fees and other card fees with which consumers are only too familiar."
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