In 2023, credit card swipe fees for Visa and Mastercard reached a record high of $100.77 billion, as reported by the Merchants Payments Coalition. According to the association, swipe fees represent the single largest expense for retailers such as convenience stores, except from wages.
“In 2023, swipe fees hit a new high for Main Street retailers and customers once more,” stated Christine Pollack, vice president of government relations at The Food Industry Association (FMI). “Visa and Mastercard adjusted the banks’ prices last year, resulting in credit card swipe fees exceeding $100 billion. That is a terrible burden to place on Main Street companies and their patrons.
The cost of credit cards bearing the Visa and Mastercard logos increased by $7.5 billion for American retailers.
compared to 2022, according to the Merchants Payments Coalition. Debit card fees included, the total swipe fees exceeded $172 billion, up from $160 billion in 2022. Additionally, the coalition stated that of that amount, debit and credit cards with the Visa or Mastercard logos accounted for more than $132 billion in swipe fees.
One of the main proponents of the Credit Card Competition Act is Senate Judiciary Committee Chairman Dick Durbin (D-Illinois). The act’s goal is to free retailers from swipe fees by severing the dominant Visa and Mastercard hold.
Additionally, the Federal Reserve Board has extended until May 12 the time for comments on its proposed debit card swipe fee. The amount that banks can charge for debit swipe fees would drop from 21 cents to 14.4 under this proposal.
Instead of banks competing to give retailers the best deal, Visa and Mastercard control 80% of the market and centrally set the swipe fees imposed by banks that issue cards under their brands. The Merchants Payments Coalition argued that by limiting processing to their own networks, Visa and Mastercard likewise stifle competition.
Supermarkets, convenience stores, gas stations, internet retailers, and others are represented by the Merchants Payments Coalition in Washington, D.C., which advocates for a more open, transparent, and competitive card system that benefits both customers and merchants.
