SENATORS LOOK FOR ANSWERS ON CREDIT CARD INTERCHANGE FEES

Senators Richard Durbin (D-IL), Olympia Snowe (R-ME), Herb Kohl (D-WI), and Arlen Specter (R-PA) have sent a letter to Joseph Saunders, Chairman and Chief Executive Officer of Visa Inc., and Robert Selander, President and Chief Executive Officer of MasterCard Worldwide, asking them to provide detailed documentation on the methodology and data that Visa and MasterCard use to set interchange fee rates. Interchange fees are supposed to ensure that issuing banks can cover their costs in processing and authorizing transactions. However, the $42 billion that Visa and MasterCard collected last year has raised concerns in Congress that interchange fees are an enormous profit center through which a variety of marketing and rewards programs are funded.

The Senators requested that Visa and MasterCard provide by June 3 an itemized list of the costs that issuing institutions bear in processing transactions made with Visa and MasterCard cards. The letter also asks for data on the amount of costs per transaction and for information on activities paid for by interchange fees.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: