New legislation requires Visa and MasterCard to negotiate fees charged to retailers.
A House committee last week approved a bill that requires Visa, MasterCard and other credit card companies to negotiate payment transaction fees charged to merchants.
The Credit Card Fair Fee Act, which passed the House Judiciary Committee by a vote of 19-16, is being hailed as a victory by supermarket, grocery store and gas station owners, who say the co-called interchange fees amount to two percent of every purchase. Among other provisions, the bill allows retailers to band together to negotiate lower rates with credit card providers and banks.
"Now that Congress and the public are learning how credit card fees are driving up the price of gas, food and other necessities, the big credit card companies are in for a very rough ride," Richard Oneslager, the chairman of the National Association of Convenience Stores, said in a statement.
Steve Pfister, the National Retail Federation's senior vice president for government relations, called the legislation a "sensible solution to an escalating problem that's costing consumers more every day."
Credit card companies say lower fees will simply shift a larger share of payment transaction costs on to consumers, boosting prices even higher.
According to Visa, the fees currently average about 1.6 percent.
Josh Floum, Visa's general counsel, has attacked the move as a form of price fixing. In a statement released last week, Floum said the bill mandates "unnecessary regulatory intervention into a fiercely competitive industry that is benefiting consumers, merchants and financial institutions."
The bill is expected to be taken up by the House and Senate in the weeks ahead.