"We are pleased that Chairman Stearns and the Subcommittee are shining a light on this increasing burden on small business," said John Gay, senior vice president, government affairs and public policy.
The so-called interchange, a fee that is collectively set by Visa and MasterCard's member banks, is a percentage of each transaction sometimes accompanied by a flat fee that banks collect from retailers every time a credit or debit card is used to pay for a purchase, adding up to billions of dollars each year.
The fees are meant to cover the cost of processing a credit card transaction and the risk taken by the issuing bank that it will be repaid. However, the NRA said, reports show that both fraud and the cost of processing are steadily decreasing in the United States, while rates continue to rise. The result appears to be a cash flow for MasterCard and Visa, and a drain on restaurant operators' bottom lines, according to the NRA.
Interchange impacts not only the merchants, but has the largest impact on American consumers, the NRA said, becoming a "hidden tax" that is estimated to have cost the average American household approximately $232 in 2004.
"Restaurants and retailers pay among the highest interchange rates in the world, even in the midst of low interest rates, decreased fraud, and rapidly growing volume," said Todd Mann, senior vice president of business development. "It is critical that we find a way to slow the out-of-control interchange increases that are hurting restaurants, and ultimately consumers."
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