The Fed meets to limit debit card fees
A convenience store owner in Chicago.
TEXT OF INTERVIEW
STEVE CHIOTAKIS: The Federal Reserve meets today, looking to limit the amount of fees debit card issuers can charge on their cards. What does that mean for consumers and businesses that accept those debit cards?
Jeff Miller is chairman of the National Association of Convenience Stores. He owns a small chain stores in Virginia. And he's with us this morning from Norfolk. Hi Jeff.
JEFF MILLER: Good morning.
CHIOTAKIS: How is your business affected by these interchange fees?
MILLER: We get charged approximately 2 percent on every transaction that takes place in our stores with a credit card. It's a really outrageous number. On a $50 charge, we pay the credit card companies 87 and half cents -- 88 cents. If we were to take a check, instead of a debit card, it costs about a dime to process a check.
CHIOTAKIS: How did we get here? Where did this come from?
MILLER: I gues the basic way to say it is we about 10 banks that get together to set these interchange rates that they will charge each other, and these rates have been set and cartel-like fashion for years. And I think what's happened is they've gotten a little greedy.
CHIOTAKIS: If these interchange fees are reduced in some way, do you foresee lowering your prices because that fees been reduced?
MILLER: Absolutely. Right now our customers across the board pay about a nickel a gallon on gasoline more than they should because that nickel goes to the credit card companies.
CHIOTAKIS: Why not just not take debit cards?
MILLER: In our industry, now, roughly 65 percent of our transactions are paid for with plastic in one form or another. If I as a retailer said I'm not taking debit cards anymore, there's always a gas station across the street so as a competitive guy across the street, he's going to see geez if you're not taking debit cards over there I'm going to take them. I'm going to steal all his customers. I'll make it up on the increased volume.
CHIOTAKIS: Jeff Miller, Chairman of the National Association of Convenient Stores, joining us from Norfolk, thank Jeff.
MILLER: Thank you.