NRF And EPC’s Swipe-Fee Flame War: Full Of Sound And Fury, Signifying Nothing

Written by Frank Hayes
February 6th, 2013

The NRF and the Electronic Payments Coalition (EPC) have launched what is essentially a flame war over the swipe surcharges that are allowed under the interchange settlement as of January 27. NRF launched the first broadside, calling surcharges a “ridiculous concept” and deriding “propaganda” suggesting any retailer would use them. EPC fired back on Tuesday (Feb. 5), calling NRF’s statements “false and misleading.”

This isn’t complicated—the retailers most likely to adopt swipe-fee surcharges are the ones currently offering discounts for using cash, and that group doesn’t include most big chains. But NRF is also fighting the interchange settlement and EPC is supporting it, which goes a long way to explain some otherwise pretty incomprehensible flaming.

First came news stories last month announcing that, as of January 27, merchants could start adding a surcharge for transactions using a credit or debit card under terms of the interchange settlement. Then came follow-up stories with predictable denials by Walmart Walmart (NYSE:WMT), Target (NYSE:TGT), Macy’s (NYSE:M) and Sears (NASDAQ:SHLD) saying that they weren’t going to slap customers with a new fee.

Then NRF weighed in with a January 30 statement. “The ridiculous concept that merchants will start surcharging on any widespread basis is propaganda being spread by the card industry in an attempt to divert attention from their skyrocketing swipe fees,” said NRF General Counsel Mallory Duncan. “We have discussed the settlement with many of our members and other merchants, and not a single one has said they will surcharge.”

NRF also described the surcharge as “theoretically allowed” by the settlement. “National and regional chains don’t want to surcharge and probably couldn’t,” Duncan added.

On Tuesday (Feb. 5), EPC returned fire to correct “false and misleading statements made recently by the National Retail Federation,” including NRF’s argument that chains don’t want to surcharge. “Is it true, as stated by the NRF, that merchants and their trade organizations did not want the ability to surcharge? No, that is not true. Both merchants and trade organizations demanded the option of surcharging as part of the settlement agreement.”

The EPC statement went on: “Previously, both Visa (NYSE:V) and MasterCard (NYSE:MA) had longstanding rules that prohibited this practice, and reluctantly gave up this ‘No Surcharge Rule’ as a compromise in order to settle the lawsuit. In fact, retailers have been asking for the ability to surcharge for years, as stated in testimony before Congress, in letters to California in relation to its surcharging ban, and outlined in the settlement agreement.”

Of course, neither NRF or EPC are owning up to the obvious: Customers are already paying swipe fees.


One Comment | Read NRF And EPC’s Swipe-Fee Flame War: Full Of Sound And Fury, Signifying Nothing

  1. Dennis Says:

    As a Visa/Mastercard MSP/ISO, all the calls we have received to date, from our merchants have been in the “When can I start surcharging, and how can I do it”? category. These are all small businesses that have been bearing the costs of Interchange and PCI without being able to pass on the additional costs to their customers. OF COURSE Wal-Mart will not want to do it, but the small brick-and-mortar, or mom-and-pop operations want this desperately.


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