Swipe Out

Merchants face crushing swells of credit card fees

by Kristen De Deyn Kirk

It’s a tiny-looking thing. Sometimes you can’t even find it on the counter, but it’s merchants’ second highest expense after labor: Those small, black credit card payment processors. Every time you swipe or tap, a retailer is charged a fee. Last year, the fees rocketed 24%. They broke records with fees totaling $137.8 billion, says the National Retail Federation (NRF). Estimates put the annual cost of the fees at $900 per average family.

Retailers asked Congress for relief. In the spring, senators acted, holding bipartisan hearings and introducing a bill in the summer.

A NRF media release notes: “When swipe fees on credit and debit cards go up,” Senate Judiciary Committee Chairman Richard Durbin (D-Ill) said, “it increases inflation and consumers ultimately pay the price.”

The committee’s senior Republican, Sen. Charles Grassley of Iowa, said fees “are eating into already-tight margins, especially for small business owners.”

Sen. Marsha Blackburn (R-Tenn.) said the increase means “a package of Oreos is going to cost more” for parents packing lunches for their children.

Please, keep inflation in check, and never, ever put Oreos at risk.

Durbin and Sen. Roger Marshall, M.D. (R-Kan.) sponsored the bipartisan Credit Card Competition Act of 2022 in July. The bill calls for credit card-issuing banks to offer retailers a choice of networks that can process credit transactions, with the hope that more competition results in lower fees.

Jessica Fischer, owner of six 7-Eleven franchises in Coastal Virginia, was scheduled to join a dozen 7-Eleven franchisees in supporting the bill in meetings with Washington leaders in September.

They and other backers—including the Retail Industry Leaders Association, the National Federation of Independent Business and the National Association of Convenience Stores—say much of the rising fee cost is due to two credit card companies, Visa and Mastercard. They dominate the market, collecting 83% of the fees.

The bill currently sits with the Committee on Banking, Housing, and Urban Affairs.

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