The National Retail Federation (NRF) has joined bipartisan U.S. lawmakers in calling for Mastercard Inc. (MA) and Visa Inc. (V) to cancel their planned credit card swipe fee increases, which are scheduled to take effect later this month.
NRF cited a letter from both Republican and Democratic members of Congress saying higher fees would add to inflation.
“American consumers are struggling under the worst inflation in four decades and these increases would only make the situation worse,” NRF Vice President for Government Relations, Banking and Financial Services Leon Buck said. “Swipe fees are a percentage of the transaction, so banks and card networks are already receiving an unearned windfall as they piggyback on higher prices. They’re going to see billions of dollars more in revenue this year even if rates stay the same, so an increase would only add insult to injury.”
“Senators and representatives from both sides of the aisle coming together to address this issue shows that Congress recognizes the impact these fees are having on the small businesses and consumers they represent,” Buck said. “These fees drive up prices for consumers and affect shoppers in every congressional district and state in the country. We stand with lawmakers who are willing to take the side of Main Street over Wall Street.”
According to a letter send by the Congress to CEOs of Mastercard and Visa, both the companies charged retailers $77.5 billion in credit card swipe fees and $28.1 billion in debit card swipe fees last year.
“These fees, most of which are interchange fees, are deducted out of transaction amounts for credit and debit card purchases and are ultimately borne by consumers in the form of higher prices for goods and services. Raising your interchange fee rates even higher will undoubtedly increase the already high costs consumers are facing and add to inflationary pressures, which is the last thing American families deserve right now,” states the letter signed by Sen. Dick Durbin, (D-Illinois), Sen. Roger Marshall (R-Kansas); Rep. Peter Welch (D-Vermont) and Rep. Beth Van Duyne (R-Texas).
Swipe fees for all types and brands of cards totaled $137.8 billion in 2021, more than double the amount 10 years earlier, according to the Nilson Report. Swipe fees, which average 2.22 percent of the transaction amount for Visa and Mastercard credit cards, are most merchants’ highest operating cost after labor. The fees drive up consumer prices, amounting to more than $700 a year for the average American family.
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