Recently, there’s been news coverage on the trend by some gas station owners to offer discounts for drivers who pay in cash. While not widespread, these discounts are popping up at gas stations across the country–from Arizona, to Missouri, to Connecticut, to Florida. And while they can save consumers a few bucks, the real reason behind the discounts is to reduce the credit card fees retailers pay to the credit card issuers.

This is a trend credit unions should keep an eye on, especially those offering credit card programs to their members.

According to the National Association of Convenient Stores, 60% of gas purchases were made by credit cards last year, namely for the convenience plastic provides. And Visa Inc. reported that 73% of respondents to its 2008 U.S. international travel outlook study prefer credit or debit cards as their payment method while traveling. Using credit cards is practical and quick–with pay-at-the-pump features, there’s no need to leave your car and wait in line to pay. It can also be safer, eliminating the need to have large quantities of cash on hand to pay for today’s higher priced fill ups–cash that can be lost or stolen. Paying by credit card includes consumer protections against theft and fraud. And, credit card payments provide a paper trail–a big downside to using cash. Many of these benefits would be impossible without interchange fees.

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