We cannot stress three points enough. First, all consumers, even those who pay with cash, pay more at the store because the interchange fees that merchants pay banks are passed on to all customers.

Second, the success of the banks' legally suspect practices has given them tremendous market power. In anti-trust terms this allows them to dictate the terms of trade: Merchants have no choice but to accept Visa and Mastercard products on the sellers' terms. Otherwise, they will lose customers and sales.

Third, the banks engage in a variety of deceptive practices to drive consumers to higher cost forms of payment. For example, many banks surcharge PIN-debit transactions even though those are safer, less costly, and have a far lower opportunity for fraud than signature-debit transactions. They engage in these tactics to maximize their interchange fee revenue.