Following Amazon’s lead, U.S. merchants tackle card fees

In a letter to U.S. lawmakers this week, the Merchant Payments Coalition (MPC) expressed frustration at credit card companies’ high swipe fees. The move follows Amazon’s last-minute decision to continue accepting Visa cards in the U.K.; it had previously threatened to drop Visa due to its high transaction fees.

Why should we care?
Many interpreted Amazon U.K.’s touch-and-go relationship with Visa as a deliberate game of chicken: an effort to scare Visa toward the negotiating table. To Visa, lowering its swipe fees exclusively for Amazon represents a more acceptable loss than hemorrhaging consumers. Through its letter to U.S. lawmakers, the MPC—which represents retailers, supermarkets, gas stations, and other outlets that pay billions in transaction fees per year—suggests it wants a similar deal from Visa and other credit card companies. With an increasingly diverse payments landscape, in which Visa and MasterCard are no longer the sole players, Visa rightfully feels the heat. Amazon’s stubbornness further proves that the MPC’s members could succeed through collective refusal. Their letter to the U.S. Senate Committee on Banking, Housing and Urban Affairs may be an opening salvo before more escalated measures. At this juncture, credit card fees are unlikely to undergo a precipitous decline, but exceptional deals to lower fees for insistent players may increasingly become the norm.