Visa Survey Suggests Customers Not Sympathetic to Merchant Costs
A new survey conducted by Visa recently found that consumers aren’t sympathetic to merchants when it comes to the costs of accepting credit and debit cards. It turns out that “consumers believe retailers benefit far more from accepting credit and debit cards than they pay in costs.” Consumers also believe that merchants look at card acceptance costs as a cost of doing business, just like they look at electricity.
Here is an excerpt from the survey that is especially interesting:
Retailers and their well-funded trade associations have filed lawsuits and are aggressively lobbying Congress to allow them to shift their business costs to consumers by allowing merchants to charge checkout fees whenever consumers use credit or debit cards. At the same time, national convenience store chains have launched misleading, in-store petition campaigns to cover for their checkout fee efforts.
“The response is loud and clear: consumers aren’t buying the message convenience store chains and big retailers are selling,” said Bill Sheedy, group president of the Americas for Visa Inc. “This research demonstrates that consumers are well aware that legislation is a Trojan horse that likely will lead to higher prices for cardholders while retailers pocket the savings.”
“Retailers want the best of both worlds – the benefits of card acceptance without paying the costs,” Sheedy added. “This research shows that retailers who are campaigning for checkout fees or uneven legislative schemes that shift the cost of doing business onto the backs of consumers are risking a customer backlash.”
I think it is instructive to put all of this is some historical context. When credit cards and charge cards first came to market a lot of merchants looked at them a fantastic innovation. Why? Because a lot of merchants ran their own credit operations but were unable to successfully account for the risks of doing so and thus found it hard to maintain these practices (even though customers demanded to be able to buy on credit). In essence, merchants looked at credit and charge cards as a way to outsource their expensive and time consuming in-store credit operations. (source: Paying with Plastic)
With that said I should mention that we, at FeeFighters, do believe that merchant credit card fees are still far too high. That is why we built the FeeFighters credit card processing comparison shopping engine after all (we want merchants to obtain the best possible rates that they can). However, we do believe that accepting credit cards and debit cards is important for merchants and that it is certainly demanded by consumers. Even before the dawn of credit and charge cards consumers demanded that merchants allow them to purchase items on credit. Credit cards allow merchants to offer that service without all of the hassle and the risks associated with running their own credit programs.
(via PaymentsNews.com)
