Senators move to strike card fees
NEW YORK — Visa Inc. and MasterCard Inc. faced a renewed threat to one of the credit card industry’s biggest revenue sources after Senator Patrick Leahy backed legislation to help merchants cut the cost of accepting payment cards.
Leahy, a Vermont Democrat and chairman of the Senate Judiciary Committee, will cosponsor a measure by Senate majority whip Dick Durbin of Illinois that lets merchants offer customers discounts for using cash or a particular card brand, a Durbin spokesman said yesterday. Merchants who accept cards typically must pay about 2 percent per transaction.
The industry has escaped previous attempts to curtail so-called interchange or swipe fees, which bring in more than $40 billion a year. Now the nation’s biggest card networks and lenders find themselves pitted against two of the most powerful senators over the fees, which some lawmakers and retailers have said are excessive and hurt small businesses.
“The motivation behind this is really to put merchants in a position where they don’t pay their fair share,’’ MasterCard chief executive Robert W. Selander said yesterday after the Purchase, N.Y., company posted a 24 percent rise in first-quarter net income.
Durbin’s measure, which is planned as an amendment to the financial industry overhaul bill, also would allow retailers to set maximum or minimum transaction amounts for payment cards.