The newly-introduced Credit Card Fair Fee Act, by lawmakers in the US House of Representatives, provides merchants and retailers the leeway to enter negotiate with banks over the reduction of costs connected to credit card purchases.

The focus of the proposed move is essentially on the so-called 'interchange fee' that the banks receive from service stations, restaurants, and various other stores for purchases paid for via the credit cards. The measure follows complaints about the alleged 'blocking' of the fee structure negotiations with credit card networks Visa Inc and MasterCard Inc, who have banks as their members.

With store owners and retailers also complaining that banks get together to set the fee structure, the supposedly 'anti-competitive' practice has the burden of the credit card fees being passed on to the hapless consumers.

Meanwhile, Visa and MasterCard - who set the fee structure and manage nearly 75 percent of the volume of transactions on general purpose cards - have asserted that merchants and retailers actually have the opportunity to bargain lower fees.

Talking about the new legislation, House Judiciary Committee Chairman John Conyers said: "This legislation will give merchants a seat at the table in the determination of these fees. The bill enhances competition by allowing merchants to negotiate with the dominant banks for the terms and rates of the fees."