Lobby group says high interchange fees are good for customers

Media and advertising news site Mumbrella has reported on a campaign by US-based non-profit organisation The International Alliance for Electronic Payments, which is lobbying against increased credit card interchange fee caps, thereby opposing Reserve Bank of Australia's plans to remove Eftpos interchange fees.
 
According to statements on the My Card Matters website, as a result of Australia's move to impose interchange fee caps a decade ago, consumers now pay 50 per cent more for their cards.
 
Here's one reason for this situation that the website has suggested: Australian small merchants now pay up to ten times more to accept card payments than large merchants. Fees for standard four-party credit cards increased by 22 per cent between 2001 and 2004, while annual fees for rewards cards increased by 47 to 77 per cent.
 
"The interchange cap has also benefited merchants to the extent of approximately A$850 million per year but merchants have yet to show evidence these savings have been passed on to the consumers," the "My Card Matters" website asserts.
 
Both Visa and Eftpos have distanced themselves from any talk of a campaign, and told Mumbrella they have had nothing to do with the 'Don't Change my Interchange' campaign.
 
Consumer body Choice yesterday branded the campaign "shadowy", arguing it was unclear who exactly was behind the ads which, according to a press release issued by the IAEP, will run nationally across TV and radio.
 
The campaign will warn consumers they could lose a number of benefits if the interchange fee is removed, including: ability to use cards online and in stores; fraud protection and security; money being restored in full if it's stolen; access to credit; and interest free credit for up to 55 days.