http://truthonthemarket.com/2009/12/09/interchange-fees-and-other-rules/ Academic commentary on law, business, economics and more Tue, 14 Feb 2012 19:40:24 +0000 hourly 1 http://wordpress.com/ http://truthonthemarket.com/2009/12/09/interchange-fees-and-other-rules/#comment-8001 Thu, 10 Dec 2009 20:55:35 +0000 http://www.truthonthemarket.com/?p=3228#comment-8001 In response to Andy S., businesses can indeed drive their costs down in this area greatly if they understand the underlying factors that regulate Interchange and overall processing expense.
Although Visa & Mastercard and the processing companies that sell these services have devised an increasingly confusing pricing model, if armed with the proper information, businesses can reduce their expense drastically.
My company, Financial Mitigation Services, serves as an educational company to help businesses work with their current processor to reduce unnecessary fees, excess charges and eliminate billing errors. Our average client saves several thousand dollars per year on this expense and some have cut costs by over 40%.
While legislation and pressure by trade associations may be helpful in the future, businesses that simply wait for these things to occur to lower their prices are throwing money away every month that they do not need to. Smart business owners are taking action now to reduce these costs.

]]> http://truthonthemarket.com/2009/12/09/interchange-fees-and-other-rules/#comment-8000 Thu, 10 Dec 2009 17:43:49 +0000 http://www.truthonthemarket.com/?p=3228#comment-8000 Jean M – maybe you could explain how businesses can negotiate and manage all other costs, including rent, labor, health care, fuel, etc., but this is the only expense over which they have no control. Also, it’s not just merchants who are paying interchange, but it’s states and localities, charities accepting online donations, colleges and universities, and anyone else that takes plastic, including politicians accepting donations. See recent article on Oklahoma Univ. trying to save $500K annually in interchange fees: http://ow.ly/KAxs

]]> http://truthonthemarket.com/2009/12/09/interchange-fees-and-other-rules/#comment-7999 Thu, 10 Dec 2009 00:26:33 +0000 http://www.truthonthemarket.com/?p=3228#comment-7999 The “no surcharge rule” precludes merchants from charging a premium for using credit cards but it DOES NOT preclude them from giving a discount for cash purchases. If merchants are so concerned they should encourage me to use cash. I frequent a store that does this and I use cash there. These fees are a cost of doing business like shipping, postage, telephone service and internet access. Consumers won’t see any decrease in prices from any cap or reduction on interchange fees. That justification is smoke and mirrors and merchants are just jumping on the big bank bashing bandwagon.

]]> http://truthonthemarket.com/2009/12/09/interchange-fees-and-other-rules/#comment-7998 Tue, 08 Dec 2009 17:07:16 +0000 http://www.truthonthemarket.com/?p=3228#comment-7998 [...] most notably for online air ticket purchases and phone payments), the interchange fee is neutral (as I pointed out in my previous post). That is, the interchange fee reduction causes merchant fees to fall but issuer fees to rise (or [...]

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