The country's largest restaurant trade group joined a chorus of detractors claiming that a proposed settlement over credit card interchange fees doesn't go far enough to foster competition among merchant banks. In a statement to reporters, Dawn Sweeney, President and CEO of the National Restaurant Association, said that the pending deal with Visa, MasterCard, and a host of member banks will not "fundamentally change a broken marketplace in which swipe fees are set."
Sweeney told journalists that small business owners don't always know what they're paying for the convenience of accepting credit cards. With little bargaining power, Sweeney said, restaurateurs can surrender as much as 5 percent of their revenues to banks, a high price to pay in an industry with small margins. Trade groups representing convenience store owners, truck stop operators, pharmacists, and grocers have also rejected the settlement.
Last July, attorneys for the defendants announced what they called "the largest antitrust settlement in history." Visa, MasterCard, and major banks earmarked over $7 billion for refunds and reduced fees to merchants who claim that a lack of competition artificially inflated the rates businesses pay to accept credit and debit cards. Attorneys claimed at the time that reduced fees would trickle down to the consumer in the form of lower prices on goods and services. National Retail Federation President and CEO Matthew Shay told ABC News that retailers were "simply too competitive" to keep the fee reductions and rebates as profits.
Meanwhile, banking industry lobbyists such as the Electronic Payments Coalition have told reporters that big box retailers drove the push for the deal without fulfilling promises to discount their merchandise for debit card users. Banks use their portion of interchange fees to fund customer benefits such as cash back credit cards, rewards credit cards, and free checking accounts. The deal awaits confirmation by a federal judge, but could become void if plaintiffs representing more than a quarter of the defendants' actual processing volume back out of the agreement.