MasterCard Cries Foul As 7-Eleven Readies Interchange Petitions

7-Eleven Inc. misled consumers who signed a petition asking Congress to regulate card interchange, MasterCard Inc. charged on Tuesday, one day before officials with the convenience-store chain are expected to deliver nearly 1.7 million signed petitions to Capitol Hill. Armed with the results of a consumer survey, executives with the No. 2 bank card payment network said in a press conference that the petition falsely implies that consumers will save money if interchange controls are passed by Congress, which is considering three separate pieces of legislation that would in different ways regulate interchange. “Unfortunately, merchants are trying to get legislation that will pass on to consumers their cost of accepting cards,” Chris McWilton, president of U.S. markets for MasterCard, said during the press conference. 7-Eleven, which is scheduled to hold its own press conference on Wednesday as its chief executive and several franchisees deliver their petitions, did not return a call for comment from Digital Transactions News. To support its position that acceptance fees are a cost of doing business that merchants should absorb as they do utilities or other such expenses, McWilton and other MasterCard officials presented data from two surveys conducted by KRC Research. In the first, an online survey of 1,002 adults conducted in August, 73% agreed that acceptance costs should be borne by merchants. When shown a copy of the 7-Eleven petition, 9% clearly recalled seeing it in the merchant's stores, while 13% said they might have seen it but weren't sure. Seventy-two percent said they didn't recall seeing it. Some 80% of those surveyed said they believed consumers would benefit from legislation, since stores could keep prices lower or consumers would pay lower rates and fees for cards. But the MasterCard officials argued the experience in Australia, where the Reserve Bank of Australia imposed a cap on interchange, proves otherwise. “We have a petri dish in Australia,” said McWilton. “The benefits [of lower interchange] were never passed on to consumers in the form of lower prices, and merchants are now allowed to surcharge for cards.” In a separate phone survey of 1,001 adults in September, 61% said they would favor Congressional action to control interchange. But when asked how they would react if they knew legislation would lead to higher consumer fees for cards, that support shrank to 22%. Shawn Miles, global head of public policy at MasterCard, said the network is “actively sharing” the survey results with members of Congress and “getting very positive feedback as to why 7-Eleven would do this [petition] and did consumers really understand what they were signing.” Both MasterCard's survey and 7-Eleven's petition come as a bill in the House of Representative and one in the Senate would grant limited antitrust exemptions to merchants to boost their ability to negotiate interchange with banks. Yet another bill in the House would among other things allow merchants to surcharge for card transactions. 7-Eleven launched its petition drive in late June by placing the document at the checkout counter in 6,300 U.S. stores (Digital Transactions News, July 7). While impressive, the 1.66 million signatures the merchant says it gathered falls short of the 3 million it projected in July.