Dodd-Frank ‘swipe-fee’ reforms are good for retailers, consumers

Is it any surprise that banks prefer a rigged market when it comes to processing debit and credit card purchases for merchants?

It certainly is when they openly admit they hate competition, a fact they usually prefer not to reveal.

Consider the community banks trade association’s recent op-ed (“Don’t buy merchant groups’ latest Durbin argument,” Jan. 30), in which President Camden Fine threw against the wall some of the banks’ same old tired arguments against reform, hoping that, like spaghetti, some would stick. 

The reforms Congress passed six years ago required merchants have a choice of two companies to process these transactions to bring a modicum of competition to the business and help consumers by keeping prices lower.

“Since [reforms] have gone into effect, merchants now can select between the two unaffiliated networks,” Mr. Fine complained, “putting the merchant in charge of selecting which network the transaction is routed on.”

Exactly. That’s the point of competition. Without it, banks gouge merchants as much as a 10,000 percent markup on fees for processing credit card purchases. And even after reform of the debit market, big banks still manage to mark up those fees a stunning 500 percent. That means merchants, who compete ferociously, must raise prices to cover at least part of these outrageous “swipe fees.”

Now, Fine complains, “multiple [processing] networks compete for the merchants’ business.” This is supposed to be bad? Merchants think it sounds like a free and open market finally starting to open up.

“Furthermore,” he wrote, “why do merchant groups think retailers are in a better position to make network routing choices than community banks?”

Well, because retailers happen to believe that in the free-market system that built the largest economy in the world, customers are entitled to pick where they shop, not be told where. How can anyone take seriously the argument that we should repeal reform, as Congress is considering now, so as not to inconvenience banks by making them compete?

Banks have long gouged merchants for these processing services because Visa and MasterCard price-fix the swipe fees. The card companies and banks have long tried to squash other companies that dare to compete in this business.

And that’s what they want to go back to, with the result of higher prices for consumers, unfairly heavy burdens on Main Street small businesses, fewer jobs and a slower economy.

From Lyle Beckwith, senior vice president for government relations, National Association of Convenience Stores, Alexandria, Va.

Smart TVs bring Big Brother home

Are you watching your television, or is your television watching you, recording your conversations, and monitoring the television programs that you watch? If you have a Vizio smart TV, your viewing data may have been sold to advertisers and marketers. According to the Federal Trade Commission, the TVs collected viewing data on 11 million people without their consent. Meanwhile, Samsung smart TVs with voice recognition enabled are able to record what you say and send it to a third-party company. Some smart TVs have cameras on them. Imagine what they have captured.

I am against Big Brotherism, so I think that it should be illegal for any corporation to sell your personal information without your consent and without paying you something. Big Brother is watching you, recording you and selling your personal information.

From Chuck Mann, Greensboro, N.C.