Credit & Debit Card Swipe Fees Reached $224B in 2023
WASHINGTON, D.C. — Swipe fees charged by big banks and card networks to process credit and debit card transactions totaled $224 billion in 2023, nearly a third higher than previously believed, according to new data released by payments consulting firm CMSPI.
"This report shows that the cost of swipe fees is much higher than previously known and that the impact on small businesses and consumers is far more severe," said Jennifer Hatcher, executive committee member of the Merchants Payments Coalition (MPC) and chief public policy officer at FMI – The Food Industry Association. "This underscores the need for Congress to bring competition to the broken payments market as soon as possible."
[Read more: Majority of Voters Support Federal Action on Credit Card Fees]
"These fees are rising more rapidly than anyone knew before and have to be brought under control," Hatcher continued. "They dramatically drive up prices for almost everything anyone buys, and American families cannot afford for these fees to go any higher."
In its new "State of the Industry Report," CMSPI found that credit and debit card swipe fees reached $224 billion last year, not the $172 billion reported this past spring by The Nilson Report, a trade publication that follows the card industry. CMSPI also stated that Visa and Mastercard credit card swipe fees averaged 2.94% of the transaction amount in 2023 vs. 2.26% reported by Nilson.
While Nilson does not specify what swipe fee components are included in its numbers, CMSPI reported that its figures include interchange fees, which go to card-issuing banks; network fees, which go to card networks such as Visa or Mastercard; and processing fees, which go either to a merchant's "acquirer" bank or a third-party processor. Interchange fees, the largest of the fee components, account for $143 billion of CMSPI's 2023 total.
CMSPI collaborated with the firm's Insights Advisory Council, a panel made up of representatives of major merchants that was formed in 2023, to prepare the "State of the Industry Report."
MPC also noted that the total amount of swipe fees collected, which typically range from 2% to 4% and are most merchants' highest operating cost after labor, have more than doubled over the past decade, with fees driving up prices by approximately $1,700 a year for the average family, based on the CMSPI numbers. Conversely, Nilson numbers show that fees have driven up prices by more than $1,100 a year for average families.
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants, hotels and others fighting for a more competitive and transparent card system that is fair to consumers and merchants.