Jul

10

Credit Card Fees – Where do they come from?

Filed Under Education and Love for Learning, Entrepreneurship

As a merchant and a customer, the credit card industry has been a difficult one for me to understand, but as a merchant, a necessary evil, and as a customer, a convenient and safe way to purchase. I recently read a clear explanation of where credit card fees come from by Braintree Financial. Thanks for the write up!


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  1. Hunter on July 12, 2007 9:35 am

    Neal, I’m sure you know better than most, through your business, of the problems and frustrations with interchange fees, laughable called “merchant discount fees.” Through my work with the Merchants Payment Coalition I have been studying this issue and following it closely.

    It is particularly troubling in the system is flawed. Visa and MasterCard control more than 80% of the market and as several current lawsuits state colluded to set these interchange fees, operating in price-fixing cartels that would violate federal antitrust law in other industries. It’s wrong that the card companies raise interchange rates in order to attract more issuing banks instead of lowering rates as the costs to process transactions have plummeted.

    Luckily he House Judiciary Committee’s Antitrust Task Force is expected to hold a hearing on interchange fees this month, tentatively set for the 19th. Witnesses have not been named, but Committee members are expected to use the hearing to examine the impact of interchange fees on consumers and businesses as well as the antitrust law implications of the interchange fee system. Hopefully this will be a tough and thorough examination of interchange. Thanks.