Monday, January 4, 2010

Visa: Playing Card Games with Merchants?

The NYT has an interesting article on how Visa seems to be playing a game with merchants in regards to how it can obtain higher fees. Especially for larger retailers, pin based debit fees are lower than signed debit fees. Visa is promoting the use of signed debit (i.e. with chase offering  a "pay your bill" sweepstakes) through banks and other efforts. This pushes up fees for retailers and it's interesting to note that: The Justice Department is investigating if rules imposed by payment networks, including Visa, on merchants regarding “various payment forms” are anticompetitive, a spokeswoman said. Several bills have been introduced in Congress seeking to give merchants more ability to negotiate interchange, which is largely unregulated. Large retailers are steering customers to use only pin based debit by prompting them to use their pin after they swipe their debit cards. Visa seems to have a real hold on the industry as it increases it's domination over rhe debit card market and raises it's fees. It is a real cause for concern for retailers.....

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