The 7-Eleven chain of convenience stores fired the first data shot, releasing a statement that said it has millions of signatures of consumers upset about credit and debit card interchange fees.
The retail chain said it will deliver the more than 1.6 million signatures in 130 boxes to Congress after a Sept. 30 press conference at the U.S. Capitol. The chain collected the signatures through petition pads at its check out terminals.
The retailer claimed its petition is the largest number of signatures collected for a public policy issue on record, beating a health care reform petition submitted to Congress earlier this year with 1.3 million signatures. The chain also said U.S. Representatives will attend the press conference but had not identified any as of Sept. 29, the day before the petition release.
MasterCard fired back before 7-Eleven formally released its petition. The card brand called a press conference on Sept. 29 to release the results of a survey that, the brand said, effectively undercut 7-Eleven's attempt to use it in the campaign against card interchange.
"Electronic payments provide extraordinary value to consumers, merchants and the economy," said Chris McWilton, president, U.S. markets at MasterCard Worldwide. "Consumers appreciate that the ability to use a payment card is a win-win for them and for the merchants they visit. It's undeniable that electronic payments drive value for all merchants."
"It's surprising that 7-Eleven, a company that prides itself on convenience, would mount such an aggressive campaign against the most convenient form of payment. Even 7-Eleven itself has said many times that accepting payment cards increases their sales, enhances safety and convenience for store operators and improves customer satisfaction," said McWilton.
McWilton joined other MasterCard executives in disparaging the 7-Eleven survey, pointing out that it was an "unrestricted" and, they suggested, therefore unscientific collection of signatures, whereas the MasterCard survey had been conducted in a scientific and controlled manner, they said.
MasterCard commissioned KRC Research, a multinational research firm with offices in London, New York, Washington and Boston to conduct to surveys, each of about 1,000 adult consumers during August and September. KRC CEO Peter Schafer explained that the research firm had not sought out consumers who had actually signed the petition but instead had tried to make sure they asked questions of consumers who used convenience stores and were likely to have at least seen the petition.
"When you look closely at the petition, it looks like 7-Eleven sold consumers a bill of goods by implying consumers would save money if Congress regulates merchant fees," McWilton said. "7-Eleven never mentioned what really happens when you regulate interchange fees, and consumer support for their petition evaporates once they understand its consequences. Congress should not allow 7-Eleven and other merchants to use legislation to shift their costs to consumers."
MasterCard said its survey was designed to assess consumer opinion on card acceptance fees and consumer perceptions of the recent counter-top petition promoted by 7-Eleven and other convenience store operators and found that three in four consumers are opposed to being charged more for using a credit card and 73% agreed that the debate over fees is really just a fight between merchants and banks.
The survey found that even among initial petition supporters, three in four (75%) oppose the legislation when it would end up increasing the fees they pay for their payment cards, including 55% who said they strongly opposed it.
Along those lines, the survey found that 73% said that "the cost of accepting credit card payments" is something merchants should pay as part of their costs of doing business and 73% agreed that paying for card acceptance is a good investment for merchants because accepting credit cards helps their business.
Shawn Miles, head of global public policy at MasterCard stated: "To understand what would happen to American consumers if 7-Eleven got its way, you only need to look at what happened when the government of Australia artificially lowered interchange. Consumers there are now paying significantly higher fees to use their credit cards and receiving fewer benefits, while no one has found any real evidence that merchants lowered prices. Merchants simply pocketed the savings, and consumers were disadvantaged. None of that, however, was explained in 7-Eleven's petition."
Miles pointed to a report on the consequences of the Australian regulation by an economist with the London-based economics group CRA International found that fees on some cards have gone up almost 80%, benefits have been reduced, and some customers face excessive surcharges when they choose to use their cards.
Support for 7-Eleven's petition was associated with a fundamental misunderstanding of the impact of reduced merchant fees on consumers, MasterCard said its survey showed. Of those consumers who were inclined to sign the petition, 80% mistakenly believed that consumers would directly and immediately benefit from a reduction in merchant fees.
"What is clear from the results of this survey is that not only do consumers believe that merchant fees are a reasonable cost of doing business and something merchants should pay, but they also recognize that a retailer's acceptance of payment cards is an investment in growing their business," said Miles.