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20 Dec, 2014

European Union Helps Consumers by Capping Credit Card Fees While U.S. Lags

WASHINGTON, December 18, 2014, (BUSINESS WIRE)–The following press release was issued by Merchants Payments Coalition:

American merchants applaud the European Union for taking steps to cap card fees at a seventh of what U.S. retailers pay their banks.

The 28 countries of the European Union agreed with a committee of the EU’s Parliament to cap the fees merchants pay banks every time a customer swipes a card at 0.2 percent on debit cards and at 0.3 percent on credit cards. Countries can also set a five-cent cap on debit transactions.

The agreement also makes the card business more transparent, so that consumers can see how much swipe fees raise prices where they shop.

By contrast, Americans pay the highest credit-card swipe fees in the world, between 2 and 4 percent per transaction, or between $2 and $4 on every $100 worth of groceries, gasoline, clothing and everything else they buy. Yet most consumers don’t even know about these unfair fees.

The actual cost to the bank of each transaction is only a few pennies, which means a huge windfall for the banks.

The European agreement still needs formal approval by the EU’s member countries and a parliamentary committee before a full vote by the EU Parliament next year. It should spur policymakers in the U.S. to take a closer look at these exorbitant and fast-rising fees.

It’s time for the U.S. to learn from Europe’s example and stand up to the credit card giants who continue to fleece American consumers.

For more information about unfair swipe fees, go to the Merchants Payments Coalition website: http://www.unfaircreditcardfees.com/

The Merchants Payments Coalition is a diverse group of retailers, supermarkets, drug stores, convenience stores, restaurants, fuel stations, on-line merchants and other businesses that fights unfair credit-card fees and advocates for a more competitive and transparent card system that works better for consumers and merchants. The coalition’s member trade associations together represent almost 3 million stores with 50 million employees.