The National Retail Federation (NRF) has urged Visa and Mastercard to reverse credit card swipe fee increases set to take effect this month, citing a letter from Republican and Democratic members of Congress saying higher fees would add to inflation.
“American consumers are grappling with the worst inflation in four decades, and these increases would only make the situation worse,” said Leon Buck, NRF vice president for government relations, banking and financial services. “The swipe fee is a percentage of the transaction, so banks and card networks are already receiving an undeserved windfall by taking advantage of higher prices. They are going to see billions of dollars in additional revenue this year even if the rates remain the same, so an increase would only add insult to injury.
“Senators and Representatives from both sides of the aisle coming together to address this issue shows that Congress recognizes the impact of these fees on small businesses and the consumers they represent,” Buck said. “These fees drive up prices for consumers and affect shoppers in every congressional district and every state in the country. We support lawmakers who are willing to side with Main Street over Wall Street. »
On Friday, Senators Roger Marshall, R-Kan., and Richard J. Durbin, D-Ill., and Reps. Beth Van Duyne, R-Texas, and Peter Welch, D-Vt., sent a letter to Visa and Mastercard asking them to withdraw their plans to implement a set of swipe fee increases this month. The estimated $1.2 billion increases were due to take effect in April 2021, but were delayed for a year after Durbin and Welch said they were untimely as the economy struggled to recover from the pandemic.
“As Americans face the highest rate of inflation in decades, your profits are already high enough, and any further fee increases simply benefit vulnerable Americans,” the letter said. “Raising your interchange fee rates even further will no doubt increase the already high costs consumers face and add to inflationary pressure, which is the last thing American families deserve right now.”
Visa, Mastercard and the banks that issue their cards charged retailers $77.5 billion in credit card swipe fees last year and $28.1 billion in debit card swipe fees, the agency says. letter. Swipe fees for all card types and brands totaled $137.8 billion in 2021, more than double the amount 10 years earlier, according to the Nilson report. Swipe fees, which average 2.22% of the transaction amount for Visa and Mastercard credit cards, are the highest operating costs for most merchants after labor. The fees drive up consumer prices, amounting to more than $700 a year for the average American family.