I recently heard a talk show that aired in Utah recently where the announcer talked about the fees merchants are paying for. One of the complaints was merchants were claiming they can’t negotiate their rate. This isn’t true. They can up to the cost of Interchange. You can’t go below Interchange as it is the same for all companies, regardless of who your merchant account provider is. I can understand some merchants may be upset with the amount of money they are paying as there are some that do not have very competitive fees. However, there is a point when all of this starts to become too much and all the whining needs to end.
Take the recent 7Eleven that collected millions of signatures. They flat out admitted if Interchange was reduced, they are not going to reduce their prices. It is like everything else in business. We all want to cut costs so we increase our profits and unfortunately, Interchange is easy to single out because it is something that merchants pay on every credit card transaction. My advise to the merchant would be this. If you currently have $20,000 in credit card charges each month, how much of that would still be true if credit cards didn’t exist at all? You would only have cash and checks. Because of the way consumers use credit cards and live beyond their means, merchant’s sales are higher overall as a result of it. If credit cards didn’t exist, consumers would definitely be spending a whole lot less!