WASHINGTON– Just in time for the holidays, the nation’s merchants have thrown some new wrapping on an ongoing policy position.
“Rising swipe fees banks charge merchants to process credit card transactions could cost consumers nearly $20 billion in higher prices – and maybe more – this holiday season,” the Merchants Payments Coalition (MPC) said.
Citing figures from the National Retail Federation, the MPC said consumers are expected to spend an average $875 during the November-December holiday season for a total as high as $966.6 billion.
“Based on the average 2.24% rate for Visa and Mastercard, that would include about $20 in swipe fees for the average family – enough to buy a Barbie doll or Lego set, the two most-wanted holiday toys, or a ham or turkey for a holiday dinner,” the MPC said. “Total figures are difficult to calculate because not all purchases are paid for with credit cards. But independent payments consulting firm CMSPI estimates that about 80% of holiday purchases will be made with credit or debit cards or digital wallets this year and that swipe fees will total at least $18.6 billion even after allowing for cash purchases. That’s up from $18 billion last year.”
If all purchases were made with cards, swipe fees would total $26 billion, the MPC said, citing CMSPI data.
‘Last Thing Consumers Need’
“After a year of high inflation, the last thing consumers need is high credit card fees that make holiday purchases from toys to Christmas trees more expensive,” MPC Executive Committee member and National Retail Federation Chief Administrative Officer and General Counsel Stephanie Martz said. “Swipe fees charged by banks drive up the cost of everything Americans buy during the holidays and only Scrooge would think that’s fair as many families struggle to put smiles on children’s faces. It’s time to put Santa ahead of the Grinch and pass legislation to bring these fees under control.”
‘Highest Operating Cost’
The organization again stated that swipe fees are most merchants’ highest operating cost after labor throughout the year and too much to absorb, driving up prices they have to charge their customers. According to the MPC, swipe fees are up 50% since the pandemic and hit a record $160.7 billion last year, costing the average family over $1,000 a year, repeating its call for passage of the Credit Card Competition Act, which seeks to offer merchants additional interchange options.
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