(RTTNews) – The National Retail Federation (NRF) has joined bipartisan U.S. lawmakers in calling on Mastercard Inc. (MA) and Visa Inc. (V) to reverse their planned credit card swipe fee increases, which are expected to come into effect later this month.
NRF cited 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 getting an undeserved windfall as they lean on higher prices. They’re going to see billions of dollars in revenue additional 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 are driving up prices for consumers and hurting shoppers in every congressional district and state across the country. We support lawmakers who are willing to side with Main Street over Wall Street.”
According to a letter sent by Congress to the CEOs of Mastercard and Visa, the two companies charged retailers $77.5 billion in credit card swipe fees and $28.1 billion in debit card swipe fees. Last year.
“These fees, most of which are interchange fees, are deducted from transaction amounts for credit and debit card purchases and are ultimately borne by consumers in the form of higher prices for goods and services. Raising your interchange fee rates even further will no doubt increase the already high costs consumers face and add to inflationary pressures, which is the last thing American families deserve right now,” states the letter signed by Sen. Dick Durbin, (D-Illinois), Sen. Roger Marshall (R-Kansas); Rep. Peter Welch (D-Vermont), and Rep. Beth Van Duyne (R-Texas).
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.
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