Interchange, a fee that is collectively set by Visa and MasterCard's member banks, is a percentage of each transaction sometimes accompanied by a flat fee that banks collect from retailers every time a credit or debit card is used to pay for a purchase, adding up to billions of dollars each year.
"We are pleased that Chairman Specter and the Committee are looking into an issue that poses a burden to small businesses, including restaurants, across the country," said John Gay, senior vice president, government affairs and public policy.
Interchange fees are meant to cover the cost of processing a credit card transaction and the risk taken by the issuing bank that it will be repaid, said the NRA. However, reports cited by the association show that the cost of processing is steadily decreasing in the United States, while rates continue to rise. The result appears to be an increase in revenue for the card issuer, and a drain on a business's bottom lines.
The NRA said that in the United States, interchange impacts not only the merchants, but has the largest impact on American consumers, who were compelled to pay $232 per household in 2004.