It was a lot of hype and glory at this year's Consumer Electronics Show, with mobile phones, digital music players, and souped-up hard drives struggling to be noticed above the iPhone din.
But largely overlooked were new developments in the credit card interchange fee struggle between merchants and the credit card companies, not to mention retailers' concerns over new "swipeless" credit/debit card technology.
At the "Photography Fights Back" retailer panel session, photo store owner Mitch Goldstone dissected the fees business owners have to pay for credit card transactions.
Goldstone blasted the system as antiquated and costly to merchants.
"It's no coincidence that U.S. consumers pay the highest rates as they are the most active card users," Goldstone said.
"It made sense in the 60s, 70s and maybe even the 80s when paper transactions and human interactions and approvals were the norm. Today, the same transactions are approved and funds delivered within seconds, therefore there is no need or rationale for the fee," he said.
Goldstone is one of the plaintiffs in lawsuits filed by merchant associations challenging the interchange fees levied by Visa, MasterCard and their partner banks.
The costs for these transactions are so high that any profit the merchant makes is often wiped out, particularly for small items such as food and drinks.
Merchants say they are often forced to raise prices on all goods as a result, even when customers pay with cash and don't incur the fees.
In a recent holiday ad blitz, the Merchants' Payment Coalition derided credit card companies for the "hidden tax" that interchange fees levy on retailers and consumers, comparing them to the Grinch when it came to "stealing Christmas."
"I grew up believing that if anyone stole Christmas it was the Grinch," said one radio ad."But it turns out the credit card companies stole Christmas by taking a bite out of every present you bought with their cards."
No Swipe, No Profit?
Another development at CES that may give merchants cause for concern was Visa's announcement of a mobile payment platform that will enable shoppers to use their cell phones as credit cards.
The platform, developed in tandem with Nokia, would enable consumers to swipe cell phones enabled with a special microchip over a reader, then process their payments by pushing a button.
Visa advertised the new platform as the latest in its "contactless" payments initiative, wherein shoppers would use cards or other items to make credit purchases without "swiping" their cards or signing receipts.
Merchants are concerned about contactless payment technology, for fear that it would encourage "micropayments" -- buying small goods with credit cards. They say the transaction fees would erase any profit they would otherwise make on small sales.
