Isis Believes its on a Good Path

by Pradeep T Moudgal 0

The National Retail Federation’s top lawyer, Mallory Duncan, went on the offensive again to point out that allowing surcharges doesn’t solve the swipe fee problem as they see it. It merely shifts the cost back to the consumers, something few retailers will consider doing. His concern now is that legislators will move even farther away from taking action, claiming other remedies are available.

From Duncan’s blog:

The danger is that a ban on surcharging could give lawmakers the false belief that they have “done something” about card fees — perhaps to the point that efforts to address the real problem could be put off for years. And that is exactly what the card companies are trying to achieve. Rather than admit they have price-fixed swipe fees for decades and agree to make amends, they are trying to protect the billions of dollars at stake with a misleading straw man.

And there may be other changes afoot, which could pile on the problems for retailers. In another item, Senator Bachus, the chairman of the House Financial Services Subcommittee said:

“… during a speech on Tuesday that Congress may “revisit” Dodd-Frank’s Durbin Amendment, citing the provision’s unintended impact on local financial institutions.”

Both of these pronouncements emphasis one of the major problems merchants have had with this struggle, which is their inability to frame the narrative and tie desired cost reductions directly to consumer cost at the point of sale. In the esoteric world of fee for services, consumers seem to have a more difficult time grasping price differentials, but when it comes to shopping for a pair of pants, a loaf of bread, or a gallon of gas, they are true experts. The point of surcharges is to make cost of acceptance completely transparent to the consumer and allow them to make a payment form decision based on it. But this speaks to theory, not reality. In reality, issuers and acquirers want to shield consumers from anything that might cause them to veer away from what benefits that stakeholder the most. In that, they can agree.

Click here to read more from Duncan’s post.