Magazine article American Banker

Merchant Acquirer Blasts Visa, MC over Intercharge

Magazine article American Banker

Merchant Acquirer Blasts Visa, MC over Intercharge

Article excerpt

What was meant to be a helpful overview of the merchant-acquiring business for people in card issuing quickly became a diatribe against Visa U.S.A., MasterCard International, and the rates they set for merchants for credit card acceptance.

The speaker was Nicholas W. Baxter, the president of the large merchant-acquiring business First Omaha Merchant Solutions, a unit of First National Bank of Omaha. Among his complaints were that interchange rates have been rising faster than inflation over the last few years while other costs for banks that collect the fees have been coming down. He said the interchange competition between Visa and MasterCard has driven the increases.

The merchant business has been atrocious at keeping its house in order, he said. It has not been well served by the associations. Visa and MasterCards approach to pricing has been like waving a red flag in front of a bull to retail businesses. The way they rule is by dictat, with 30-day implementation time frames that have made life difficult for acquirers.

Mr. Baxters presentation, on Monday here at the American Bankers Associations Bank Card Conference, took note of the frequent tension between acquirers, who must pass along interchange hikes, and issuers, who charge them. The fees themselves are set by the associations.

Carl [Pascarella, the CEO of Visa U.S.A.] has said that they will not be disadvantaged by MasterCard, said Mr. Baxter. If MasterCard changes its rates, Visa will respond. They will do that until [the Justice Department] steps in and says Stop. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.