This article will tell you about the backlash by merchants against credit card companies that have been in recent news all across the globe with the major share of revolt voice coming from developed nations, where credit cards play a major role in running the economy i.e. they are a crucial tool for in-store and online transactions & whether this protest is serious concern for annual revenues of these card issuing companies in real, when seen on a global scale.
Issue in Detail
The issue arose over billion-dollar transaction fees that merchants worldwide pay to credit card issuers as swipe fees.
Kroger Co., a US grocery retailer cum conglomerate is considering a blanket ban on usage of Visa credit cards in all its facilities, to save on an annual 90 billion USD it pays to the latter, in form of swipe fees.
Share Market reacted to this in the form of shares of Visa, American Express and MasterCard facing a drop on its trading value. Merchants worldwide are looking towards alternative methods to cut on these swipe charges by way of corporate lobbying to enact laws/legislation that mandates lower swipe fees, tech upgrades and switching to alternate transaction technologies that could bypass these decades-old traditional but expensive transaction technologies, as all these efforts if bear fruit, will help them cut down on operating costs in the long run.
Is Revolt bearing any positive fruit for merchants?
Despite all these protests and retaliatory actions by merchants, the success story of these payment networks is still in continuance. As a major share of the world population from developing and underdeveloped nations shift their payment systems from cash to electronic ones and these traditional private sector service providers have a monopoly when it comes to this financial service.
To conclude, despite their poor show on major stock exchanges worldwide, the latest figures released by these firms reflect a strong increase in their subscriber base, that is no mood to slow down, as other world economies catch up with developed nations and electronic payment methods being crucial to this road to financial success.
Read More: What Is Credit Card APR? Why Is It Relevant?
