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In previous posts I have written about HR 5546 which will allow merchants to negotiate their Interchange Rates directly with Visa and MasterCard. As I have been following the developments, it seems as if the National Retail Federation is making the card processing companies out to be deceitful. In many articles the NRF has referred to Interchange fees as “hidden costs,” and also as being the cause of consumers paying more for goods. Interchange is public record.

HR 5546 is also known as the Credit Card Fair Fee Act of 2008. This bill would require Visa and MasterCard to negotiate with merchants and reach an agreement on credit card terms and conditions. If an agreement is not reached, both sides will be required to submit their final offers to binding arbitration by a three-judge panel appointed by the Department of Justice and Federal Trade Commission.

Before a bill is passed it has to go through several phases:

1. It has to be introduced
2. Reported by committee
3. Voted on in House
4. Voted on in Senate
5. Signed by the President

HR 5546 is currently up for vote in the House. Before a bill can be passed, I think it is important that merchants, as well as the National Retail Federation, understand Interchange. This bill also seems more like a hostage situation. Retailers will be holding the Associations hostage until their demands are met. If passed, it may do more harm to consumers needing to pay with credit cards if these large retailers don’t get their way on fees. The arbitration may be drawn out, costing each party involved needless legal expenses. In a credit card driven society, we may be stabbing ourselves in the foot.