Retail Groups Say Swipe Fees Will Push Easter Holiday Costs Higher

WASHINGTON, D.C. — Rising swipe fees — the fees big banks and credit card networks charge merchants to process transactions — could cost the average consumer the equivalent of a dozen eggs this Easter and potentially total more than half a billion dollars nationwide, according to the Merchants Payments Coalition (MPC).

"Rising swipe fees contribute to the cost of everything from Peeps to chocolate bunnies," said Doug Cantor, MPC Executive Committee member and NACS general counsel. "These fees make inflation even worse at a time when parents and the Easter Bunny can least afford it. And the problem won't end when Easter is over because swipe fees drive up prices for consumers all year long. The card industry refuses to stop price-fixing these fees and compete, so it's time for Congress to act."

Based on the average consumer spend of $192.01 on Easter-related items and the 2.24 percent average swipe fee for Visa and Mastercard credit cards, $4.30 per shopper will go to banks and card networks rather than the merchant when customers pay by credit card. That's just above the $4.21 average price for a dozen eggs and more than the typical cost of $3.74 for a package of Easter egg dye, according to MPC.

With cash accounting for only 19 percent of purchases in 2021, according to the Federal Reserve, and its use is rapidly declining as more spending moves online and more consumers use plastic for in-store purchases, MPC sees a greater proportion of spending directed toward banks or credit card companies.

Additionally, credit and debit card swipe fees have more than doubled over the past decade, soaring to 17 percent in2022, according to a Nilson report, and often making the fees merchants' highest operating cost after labor.

To address the issue, Senators Richard Durbin (D-Ill.) and Roger Marshall (R-Kan.) are preparing to reintroduce the Credit Card Competition Act. First introduced last year, the legislation would require banks with more than $100 billion in assets enable credit cards to be processed over at least two unaffiliated networks. One could still be Visa or Mastercard but the other would be a competing network such as NYCE, Star or Shazam. Payments consulting firm CMSPI estimates that competition would save businesses and their customers at least $11 billion a year.

Visa and Mastercard — which control 80 percent of the market — currently price fix the swipe fees charged by banks that issue cards under their brands. They also block competition by restricting processing to their own networks even though most competing networks charge lower fees and, according to the Federal Reserve, have less fraud.

The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants.