7-Eleven Franchisees Want Change From Washington

Small businesses are taking the fight against interchange fees to Washington. Last September 30, franchise owners of the nationwide chain of stores, 7-Eleven, arrived in Washington bearing petition booklets numbering 15,000 for Congress. All in all, the signatures in the booklets number 1.66 million signatures.

Interchange fees have long been a sore spot among small businesses. Credit card companies charge interchange fees to small businesses every time a customer uses a credit card to pay for their transactions. These charges are non negotiable.

David Hendricks owns two 7-Eleven franchises and serves as a board member of the Greater Los Angeles independent franchise owners of 7-Eleven. He says that, ever since 7-Eleven Japan took charge in 2005, the interchange fee situation of North American 7-Eleven franchisees got so bad that the franchisor finally decided to split the processing fee with their franchisees 50-50. “Franchise owners didn’t have input or a voice on that choice,” Hendricks says. “By 7-Eleven transferring 50% of the costs to the franchisees, they had 6,000 members who were now motivated to go to Congress to ask for regulation of interchange fees.”, he added.

According to Hendricks, American merchants also pay higher interchange fees compared to merchants from other countries. He says, “I think Australian merchants pay half percent. In Britain they pay one percent. American merchants pay as much as three percent. United States is one of the only countries in the free world where credit card companies won’t lower interchange fees”.

Credit card companies are naturally critical of the petition efforts of the 7-Eleven chain. MasterCard U.S. Markets president Chris McWilton says that the petition is a trick, asserting that 7-Eleven encouraged customers to sign the petition by implying that it would help them save money. “It’s surprising that 7-Eleven, a company that prides itself on convenience, would mount such an aggressive campaign against the most convenient form of payment. Even 7-Eleven itself has said many times that accepting payment cards increases their sales, enhances safety and convenience for store operators, and improves customer satisfaction”, he said.

Regarding the higher interchange fees that American merchants paid, MasterCard Global Public Policy Head Shawn Miles said that when the Australia government artificially lowered their interchange fees, consumers ended up paying higher fees for credit card use and received fewer benefits. He also said that there was no real evidence that prices were lowered by merchants. The savings resulting from the lowered interchange fees went to the merchants instead and it was the consumers who ended up in a disadvantage.