Interchange Price Fixing Posted by AVCU on 10:18 AM

In a Washington Post editorial by a Senior VP at the Independent Community Bankers Association, the efforts by Congress to control merchant interchange and VISA's two-tier plan to comply with the mandate are cited measures that will ultimately harm consumers, community banks and credit unions. That's because the new law and related Fed regulation will allow merchants the ability to control over which networks they route their debit card transactions, allowing them to bypass any two-tier system created by VISA or MasterCard. As a result, the writer postures, large retailers will be able to incent customers to use the rate-controlled cards issued by the largest financial institutions, discriminating against credit union, community banks, and their respective cardholders. She further predicts that VISA's new interchange pricing system will likely shift merchants' debit card acceptance fees to consumers in the form of higher fees for financial services. Meanwhile, merchants will maximize their profits.
Read the Washington Post editorial in entirety.