Business is business, but in these tough economic times most Americans are trying to pull together to get our nation back on track. This apparently does not include the credit card companies. They continue to use a hidden fee to pad their bottom lines, regardless of the damage it does to small businesses, employers and consumers.

Credit card companies charge an “interchange fee” for every swipe of a credit or debit card. Currently, U.S. businesses and consumers pay the highest interchange swipe fees in the developed world, not surprising when you consider that card companies have raised these fees over 300 percent since 2001.

This is especially shameful when you consider that improvements in technology during this same time period have made comparable transactional fees go down.

The two major credit card companies, Visa and MasterCard, control 80 percent of the U.S. market. Without government control, there is nothing to stop them from doing just what they want.

Credit card companies collected an estimated $48 billion in interchange fees last year. That’s money taken directly from the bottom lines of small businesses. For some retailers, it could have made the difference between hanging on through a difficult year or having to close their doors for good.

Operating like the uncontrolled monopolies they are, card companies dictate interchange fees on a non-transparent, non-negotiable basis. Small businesses often find themselves paying higher rates than larger operations, and all retailers are subject to rate hikes without notice or recourse.

Consumers, of course, bear the brunt of these fees. Businesses can only absorb them for so long and are then forced to pass the expense on to their customers.

This is a problem that will not go away on its own. Unlike businesses, which cut their prices to attract customers, credit card companies raise their rates to encourage banks to issue their cards. Unless Congress steps in, we can only expect interchange fees to increase, and these problems to continue.

Last spring, Congress passed the CARD Act, which instituted restrictions on interest rates and other measures to protect consumers, but it failed to address interchange fees. Both the House and Senate are now discussing additional constraints on credit cards and other financial services, and they need to make sure that interchange fees are not overlooked again. Businesses and consumers need reasonable laws that prevent credit card companies from taking advantage of them, including specific standards for interchange fees that fix the broken system we have today.

http://www.bostonherald.com/news/opinion/op_ed/view.bg?articleid=1219186