The National Association of College Stores estimates that college stores may collectively pay close to $85 million in credit card service fees every year.

Teresa Loren, an accounting manager for the University Corporation, which operates several on-campus eateries and convenience stores, said she estimates that for the 2004-05 fiscal year, fees paid by the UC for credit card transactions will total close to $100,000.

“We have seen it go up in the last couple of years,” Loren said of the fees, which are also called merchant or interchange fees. Students tend to use credit cards because of the convenience factor, she said.

The Oberlin, Ohio-based N.A.C.S., which represents the Matador Bookstore along with more than 3,200 other collegiate stores, said credit and debit purchases accounted for 54.6 percent of student purchases in college stores in 2003-04.

Loren said that there are several different fees involved. The university is charged a fee from the bank, in addition to an authorization fee that is charged for every card swipe by an intermediary company.

Visa and MasterCard then charge their own merchant fee. In April 2005, Visa and MasterCard raised the interchange rate to nearly 2.9 percent.

On average, merchant fees are 7.5 percent of the total cost of the purchase,

Laura Nakoneczny, spokesperson for the N.A.C.S., said the $85 million in interchange fees from those credit and debit purchases is unregulated.

“Banks can charge whatever they want and raise whatever they want,” she said.

The U.S. Federal Reserve Bank hosted a conference in Kansas City to explore interchange fees.

“It’s a huge part of our economy and a huge part of consumer spending, and currently it’s not being regulated,” she said.

Nakoneczny said the Morgan Stanley investment bank and retail broker firm estimated that by 2010, banks would realize up to $32.4 million in interchange fee revenue.

“We are pushing for (the federal government) to take a big role to regulate,” Nakoneczny said.

She said retailers have been aware of this trend for a long time.

“Anecdotally, we do know that students are using more credit cards,” Nakoneczny said. “Especially today, when tuition is going up and student income is not necessarily going up.”

Rich Hershman, director of government relations for the N.A.C.S., said the Merchants Payments Coalition was formed a few months ago to generate awareness about the issue, and not just for college vendors.

“The coalition is actively pulling research and data to get an idea of the size of the issue,” Hershman said. “We are working to inform people (about) how merchant fees work.”

Hershman said there have been several legal cases and attempts to sue banking companies because of the high merchant fees.

“We pay more than any other country in merchant fees,” Hershman said. “We see this as a hidden tax on consumers and students.”

Loren said the UC has been proactive in trying get the fees lowered through discussions with banking and intermediary companies.

“We have gone over our budget,” Loren said, but added, “It’s the cost of doing business.”