US industry welcomes credit card hearing

Gavin Lipsith

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The International Association of Airport Duty Free Stores is among trade associations to have welcomed a congressional hearing on the multilateral interchange fee

The Merchants Payments Coalition has welcomed plans for a US congressional hearing on the secret multilateral interchange fees charged by VISA and MasterCard for processing payments. The Coalition, a collective of retail trade associations including the International Association of Airport Duty Free Stores, is hoping that the hearing will determine that the practice of the two credit card companies is anti-competitive and illegal.

The move follows similar action against the credit card companies by several major European governments over the past few months, prompted by campaigning by the travel-retail trade's Fair Payment Alliance and its domestic counterpart EuroCommerce. According to the US coalition, Visa and MasterCard collected $27.6bn in interchange fees during 2004.

Last September the UK Office of Fair Trading ruled that MasterCard's use of the multilateral interchange fee in the country was uncompetitive. In 2004, the Dutch Competition Authority fined credit card companies and banks over their use of the fee. The Spanish government has also issued judgements against the secret charge. The current action is the first time the US industry has taken a stance against the credit card charges.