As in Australia, the stakes are high in the United States. American merchants, like their counterparts Down Under, complain that the high fees they must pay credit card companies and banks to accept their cards force them to increase prices on everything they sell  even for people who pay with cash  to make up the difference. In the United States, the Government Accountability Office last week issued a report showing that consumers who did not use credit cards “may be made worse off by paying higher prices for goods and services, as merchants pass on their increasing card acceptance costs to their customers.”

The main consumer federation in Australia, Choice, says that while regulations here have had a few unintended consequences, they have created incentives for retailers and consumers alike to rely more on debit cards, which have much lower processing costs, instead of credit cards. “It drives me crazy, people buying chewing gum on a credit card,” said Christopher Zinn, a spokesman for Choice, an Australian consumer group. “We all pay for it.”

Though many people may not realize it, out of every dollar charged on a credit card, merchants in many countries, including the United States, get about 98 cents and sometimes less; the other 2 cents go to banks and credit card companies. Banks use these fees to cover fraud losses, their loss of interest on money until the consumer pays the bill, computer systems and employees who process credit card transactions. The banks also pay Visa and MasterCard for their marketing and digital networks.

But the fees also generate tens of billions of dollars in revenue each year for banks that issue cards branded by Visa and MasterCard. In the United States alone, banks that issue credit cards get an estimated $40 billion to $50 billion in income annually from interchange fees, which are the biggest single component of fees charged to merchants. The banks and card companies are lobbying heavily against proposed changes. They warn that lower fees will lead them to squeeze credit and raise the cost of credit cards at a time when the economy thirsts for credit to sustain an economic recovery.

Some of this has already happened in Australia, where in 2003, after years of retailers’ complaints, the nation’s central bank required that the interchange fees that merchants pay banks that issue Visa and MasterCard cards be cut in half, to less than 1 cent. Merchant fees for American Express and Diners’ Club were not regulated because banks did not issue their cards. But both card companies cut merchant fees anyway, to 2 cents, from 2.46 cents, to avoid losing customers to Visa and MasterCard.