Visa & Mastercard Swipe Fees Hit $100B in 2023
"Once again, Main Street merchants and consumers were hit with a new record for swipe fees in 2023," said Christine Pollack, vice president, government relations, for FMI — The Food Industry Association. "Last year, Visa and Mastercard fixed the banks' prices to the tune of more than $100 billion in credit card swipe fees. That is an awful toll for Main Street businesses and their customers to bear."
Swipe fees, on average, are the single biggest expense for merchants aside from labor. The price tag can often be too big for businesses to absorb, according to the MPC, with retailers passing those costs onto consumers.
Senate Judiciary Committee Chairman Richard Durbin (D-Ill.) one of the lead sponsors of the bipartisan Credit Card Competition Act, has scheduled a hearing on the lack of competition over swipe fees. U.S. Sens. Jack Reed (D-R.I.) and Josh Hawley (R-Mo.) have also added their names as cosponsors of the bill, joining colleagues Roger Marshall (R-Kan.), Peter Welch (D-Vt.) and J.D. Vance (R-Ohio).
The bill would force Visa and Mastercard to compete with additional payment networks. Currently, the companies control approximately 80% of the market and centrally price fix swipe fees charged by banks that issue cards under their brands rather than allowing banks to compete to offer merchants the best deal. Visa and Mastercard also restrict 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.