Merchants step up against credit cards that charge high fees
Merchants have taken a united stand in protesting against the high fees that credit cards charge them and a businesswoman has filed a lawsuit against some of the major banks, Visa, and MasterCard.
A lawsuit has been filed in B.C. Supreme Court on behalf of Mary Watson who is the owner of Metropolitan Home in Vancouver. As per the claim, it has been alleged that card issuers as well as banks are involved in a multibillion dollar conspiracy and increasing the fees that is to be paid by merchants for every transaction made on the credit card.
Visa and MasterCard charge a percentage fee when a customer pays through the card. The card issuing bank as well as the company which processes the payment also charges a fee. While the merchants are charged a smaller fee on the basic cards, the rewards cards charge a higher fee.
According to the suit that has been filed it is stated that merchants had paid around $5 billion by way of fees in the year 2009. However, as per the claim it is alleged that MasterCard and Visa had stringent rules that forced merchants to accept all the MasterCard and Visa card even if the merchants had to shell out higher fees. Merchants are also prevented from charging extra for payments that are made using the premium cards as per the claim.
Mary Watson was quoted as saying that there has to be some accountability and proper information has to be given to the consumers. She also stated that the customers would be shocked if they get to know the difference in rates between one cared to another.
When the higher premium card fees had been introduced initially, there was a lot of confusion amongst merchants, stated Mark Startup, President and CEO, Retail Entrepreneur Association, Shelfspace. He also went on to state that the fees the retailers had to pay had certainly gone up and the worst part was that the retailers were not able to decipher anything regarding the high fees by merely looking at their statements.
Last December, the federal competition watchdog had also filed similar action lawsuits with the same claims focusing on the fee that was being imposed on merchants for every card transaction.
A prohibition order will be issued by the Competition Tribunal against these card issuers and the anticompetitive and restrictive rules imposed by MasterCard and Visa would be struck down.
