Retailers are demanding cheaper fees from credit card Companies, who are seen as charging excessive fees as online trade drives bigger credit card transactions.
Retailers now spend more than A$152 billion accepting credit and debit cards every year, according to the industry publication the Nielsen Report.
While banks reap the bulk of that amount, it’s the card networks like Visa and Mastercard that set the fees.
According to Bloomberg, a coalition of trade associations representing some of the world’s largest retailers has called on antitrust regulators in the USA to examine the fees charged by credit-card companies after Amazon threatened to ban Visa cards.
Amazon, along with several other large online retailers, are concerned about the “excessively high” fees Visa and rival Mastercard charge retailers.
If successful in the UK and the USA it’s expected that retailers in Australia will also demand cheaper fees.
Australian retailers have complained about the rising cost of accepting debit and credit cards in the past, but because of the size of the market they have had little success.
Their disdain has been heightened during the pandemic as card usage swelled and more consumers shopped online, where transaction fees are even higher.
Earlier this week, Amazon paused a looming ban on accepting Visa credit cards held by U.K. customers after saying it planned to ban such cards on its site starting Wednesday, due to rising transaction costs.
Bloomberg reported, “We believe U.S. authorities should look closely at what Amazon has done in the U.K. and need to be aware that many retailers here feel the same,” the Merchants Payments Coalition said in a letter to regulators, including those at the Federal Trade Commission and the Department of Justice. “Despite the reversal, Amazon’s move shows how frustrated even the largest retailers are over skyrocketing swipe fees, and the situation is even worse for small retailers.”
Visa, who has been rolling out the same argument for years, responded claiming swipe fees help pay for the technology and systems that monitor for fraud and other abuses and also allow for consumers to spend freely and easily at millions of merchants across the globe.
“We’ve sorted these out before, we will get back to the point where our relationship with Amazon goes back to where it used to be,” Visa Chief Financial Officer Vasant Prabhu said last month. “Of course, it takes two to tango.”
“Merchants large and small are closely watching the Amazon-Visa developments in the U.K. and hope that U.S. policymakers are doing the same,” the coalition said in the letter. “Few, however, have the size and resources of Amazon that are required to stand up to an entity as powerful as Visa.”
