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Retailers and Credit Card Companies Fighting Over Interchange Fees

Roll Call, a Capitol Hill newspaper, is reporting that retailers and credit card companies are facing off over interchange fees as merchants try to add language to a Senate bill that limits the ability of banks to raise interest rates.

The fees, which are about 2 percent of each purchase and charged to merchants each time a customer uses a credit or debit card.

Visa and MasterCard, which together control 80 percent of the credit card market, argue that the fees are necessary to cover their infrastructure costs, and that they are also the ones guaranteeing payment to the merchants and should be compensated for that risk.

Both sides have put forward their most sympathetic voices, with small mom-and-pop merchants speaking out against the fees, and community banks and credit unions arguing that they are necessary.