AFP Supports Further Scrutiny on Interchange Fees

BETHESDA, MD - FEBRUARY 15, 2006 - AFP President and CEO, Jim Kaitz issued the following statement today in response to today's House Subcommittee on Commerce, Trade, and Consumer Protection hearing "The Law and Economics of Interchange Fees."

"As both credit and debit card usage continues to increase, members of the Association for Financial Professionals (AFP) are growing more concerned about interchange fees. Our October 2005 survey raised serious questions about the competitiveness of the credit card marketplace, an increasingly important part of the U. S. payment system," said Kaitz.

AFP recently released the results of a member survey that found that organizations are unable to refuse credit cards even as the costs associated with accepting credit and debit cards increase significantly. Many financial professionals believe their organization would sustain a significant decline in sales if it no longer accepted certain cards, especially those offered by Visa and MasterCard.

Key findings of the AFP's Interchange Survey include:

• Virtually all organizations that accept credit cards indicate that they do so to "satisfy customer demand to pay with a credit card."
• A third of organizations that sell to consumers have programs that encourage their customers to use a preferred payment method (including asking for specific payment method at the point-of-sale and price incentives).
• Many organizations have strategies to reduce the costs of accepting credit cards.
• Half of survey respondents believe their organizations would sustain a significant decline in sales if they decided to no longer accept Visa and/or MasterCard credit cards.
• Fifty-one percent of organizations accept purchasing cards from their business customers.
• Two-thirds of organizations use purchasing cards to make purchases.
• Most organizations believe that the credit card associations are engaged in price-fixing and anti-competitive behavior and support caps on interchange fees.

"AFP supports policies and practices that promote fairness and competition in the major components of our financial system and our survey highlights the need for further scrutiny in this area," Kaitz concluded.

Full survey results are available at www.AFPonline.org/research

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The Association for Financial Professionals (AFP) in Bethesda, Maryland, supports more than 14,000 individual members from a wide range of industries throughout all stages of their careers in various aspects of treasury and financial management. AFP is the preferred resource for financial professionals for continuing education, financial tools and publications, career development, certifications, research, representation to legislators and regulators, and the development of industry standards. For more information about AFP visit http://www.AFPonline.org/