Convenience Store Retailers Urged to Take Up Fight Against Swipe Fees

WASHINGTON, D.C. — The legislative fight over the cost of doing business with credit and debit cards wages on in the convenience channel and in the halls of Capitol Hill.

NACS is urging convenience retailers to bring a grassroots movement in support of the Credit Card Competition Act to its stores. If passed, the Credit Card Competition Act would result in $15 billion in savings annually, which totals about $9,000 per convenience store per year, according to the association.

As part of the campaign, NACS is asking c-store retailers to install pump toppers and window displays — which are available for download on the association's website. Retailers can choose from multiples versions and sizes. The downloads also include a "thank you" sign for retailers to display if its congressional representative already supports the legislation.

[Read more: Retailers Continue to Push for Passage of Credit Card Competition Act]

The renewed push over swipe fees comes as Visa and Mastercard are reportedly preparing to increase their swipe fees in October and April, a move that could potentially cost retailers an additional $502 million annually, according to The Wall Street Journal.

Earlier this week, U.S. Senate Majority Whip Dick Durbin (D-Ill.), urged his colleagues to bring the Credit Card Competition Act to a vote in the full Senate. Durbin introduced the bipartisan legislation with Sen. Roger Marshall (R-Kan.).

"We're fighting inflation in America, and Visa and Mastercard are on the other side of the battle. Consumers and retailers are trying to keep prices down. Visa and Mastercard are trying to run them up with a fee they charge for each transaction," Durbin said in a Sept. 13 speech on the Senate floor.

The bill would direct the Federal Reserve to ensure that the largest credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed. Sens. Peter Welch (D-Vt.) and J.D. Vance (R-Ohio) joined Durbin and Marshall in introducing the legislation.

"American consumers today are concerned about inflation and the high prices of groceries and gas. What they may not know is that the fees charged when they use their credit card, known as swipe fees, are adding to this problem," Durbin said. "Each time a credit card is used — whether for groceries, gasoline, critical drugs, or anything else — Visa and Mastercard charge an interchange fee. Some of that they keep for themselves, but most of it is given to the bank that issued the card.

"Visa and Mastercard set the fees on behalf of thousands of banks and tell merchants, the retailers, the restaurants to take it or leave it. Merchants have no real choice but to accept the outrageous fees if they want to have credit cards used by their customers.  There is no negotiation or competition. Small business owners and consumers, take it or leave it, are holding the bag," he added.

According to the Retail Industry Leaders Association (RILA), merchants paid 20-plus percent more on credit card swipe fees in 2022 vs. 2021, resulting in a total of $93.2 billion in credit card interchange fees.

"Retailers are fed-up with the outrageous fees charged by Visa, Mastercard and Wall Street banks for credit card transactions. These fees are already exorbitant and are based on a broken system —Visa and Mastercard keep increasing them because there is no competition allowed in the market to stop them," said Austen Jensen, RILA executive vice president.

"Congress needs to act and put an end to this duopoly by passing the bipartisan Credit Card Competition Act which will inject more competition into the credit card market," Jensen added.