FMI Statement: According to a New Report From The U.S. Department of Treasury Government Would See Significant Cost Savings From Reasonable Interchange Rates

ARLINGTON, VA — June 16, 2010 — The Food Marketing Institute (FMI) issued the following statement from Jennifer Hatcher, group vice president of government relations, on this week’s report from the U.S. Department of Treasury that found the federal government could save more than $36 million a year if the government could negotiate their interchange rates with Visa and MasterCard. Under the current system, the interchange swipe fees are unilaterally set by the large card companies.

     “This week’s news from the U.S. Department of Treasury shows that the federal government can’t catch a break on interchange rates and American taxpayers foot the bill. Americans are paying millions of dollars every year in credit and debit card swipe fees. According to the report, federal agencies accepted more than 80 million credit and debit card transactions totaling $8.6 billion in 2009. Interchange and other fees cost the government more than $116 million last year.

     “If even the U.S. government cannot negotiate with the credit card company giants, then clearly an independent grocery store owner must pay whatever fee the credit card networks impose. When an industry operates on a low profit margin of 1 to 2 percent, it is the customer who pays these fees,” said Hatcher.