Other congressional leaders have promised a push to limit interchange fees, including Sen. Patrick J. Leahy (D-Vt.), chairman of the Senate Judiciary Committee; Sen. Charles E. Grassley (R-Iowa), his party's ranking member on the Senate Finance Committee; Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee; and Sen. Norm Coleman (R-Minn.).
Coleman, speaking to a panel of bank chief executives during a Senate subcommittee hearing this month, summarized the concerns of many small businesses, saying, "Interchange fees can significantly impact the prices charged by merchants and retailers, many of whom already operate on extremely thin profit margins."
In a January survey of about 2,000 adults by polling service Harris Interactive, 32% had heard of interchange fees. Once the fees were explained to them, 91% said Congress should compel credit card companies to better inform consumers about interchange fees.
Congress could follow the lead of other countries and regulate the fees by law. Australia imposed new caps on interchange fees last year. Britain reduced the fees after analyzing the costs they were supposed to cover. As a result, the fees are lower in both countries -- 0.7% in Britain and 0.6% in Australia.
In the U.S., credit card companies have boosted their revenue from interchange fees in several ways in recent years. Along with slightly increasing fee rates, they have raised the number of high-fee cards in circulation and heightened incentives for cardholders to pay for purchases by credit card rather than cash or check.
Last year, consumers used credit cards at 25 million businesses nationwide, according to Chase Bank USA. Merchants say the cost of processing credit cards should be negotiable, like cash and checks.
Credit card executives say it would be impractical to negotiate fees with the different merchants that use their systems.
"We think the interchange model is the most efficient," said Rhonda Bentz, vice president at Visa USA.
But K. Craig Wildfang, a Minneapolis attorney at Robins, Kaplan, Miller & Ciresi who represents merchants in one of about 50 antitrust lawsuits pending against credit card companies over interchange fees, said, "There are plenty of ways to operate a network without millions of bilateral negotiations."
