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18/09/2009 -
Canadian merchants may want to count their blessings that they do not set up shop in the U.S., according to a recent report from the Merchants Payments Coalition.The report, released on Thursday, claimed that the interchange rate - which determines the fees merchant acquirers pay for each credit card transaction - in the United States are higher than in other major economies, including Canada, Australia, New Zealand and the European Union.
"It's the number two cost, behind labor, in our industry, and it's nonnegotiable," Lyle Beckwith, a senior vice president with the U.S.-based National Association of Convenience Stores, told the Washington Post. "And as more and more people are using plastic for payment, it's getting increasingly problematic for our industry."
The report claimed that the U.S. interchange rate - which is currently at 2 percent - is higher than Canada's 1.5 percent and more than double that of New Zealand and the United Kingdom. It is four times higher than Australia's rate.
The Merchants Payment Coalition is fighting for regulation of what it calls the unfair interchange rate, noting that if America had the same interchange rate as Australia, American consumers would have saved $125 billion over the last four years.
A spokesperson for the Electronic Payments Coalition told DigitalTransactions.com that "the premise of the study is fundamentally flawed," while many are arguing that the charges would be transferred from the merchants to the consumers.
