Friday, June 6, 2008

There is more to the May 25 front-page story about gas prices, "Peeved at Prices? Don't Blame the Dealer": the credit card interchange fee.

Interchange started as a fee to cover the cost of processing credit card charges by hand. Today, paying at the pump is fully computerized, yet credit card interchange fees have doubled since 2004, to nearly $8 billion a year just for motor fuels.

During the same period, convenience store profits have been cut in half. Dwindling profits is a big problem, and not solely for my members' wallets: Convenience stores that sell gasoline (and provide jobs) are closing.

With gasoline averaging $4 a gallon, 9 or 10 cents per gallon in interchange fees goes directly to the credit card industry -- up to $3 per fill-up for many drivers. And everyone pays interchange fees through higher gasoline prices whether they use plastic or not. No one, except perhaps the member nations of the Organization of the Petroleum Exporting Countries, enjoys higher profits from $4 gas than Visa and MasterCard.

HANK ARMOUR

Chairman and Chief Executive

National Association of Convenience Stores

Alexandria