Small merchants prefer choice over interchange price caps: Javelin

Javelin Strategy & Research and the Electronic Payments Coalition, of which NAFCU is a member, released a report Thursday showing that small merchants are more concerned about value and less about price when it comes to the interchange fees that they pay for debit card transactions.

For the study, conducted in May to June 2016, Javelin asked 500 merchants with annual sales of less than $10 million if they were satisfied with the fees they pay for card acceptance and with their relationships with their partners in the interchange process.

Javelin found that merchants who understand the interchange process are overwhelmingly satisfied with the rates they pay and will pay more for greater benefits. The study also revealed that an insufficient understanding of interchange, not price, seems to generate merchant dissatisfaction.

Key findings from the study include:

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