Less than one-quarter (21%) of consumers believe that credit card companies are honest and trustworthy when they advocate before Congress on the fees they charge retailers to accept their cards, according to a survey released by the National Retail Federation.
The Credit Card Competition Act, which is currently under consideration before Congress, would require that there be at least two competing processing networks enabled on each card, potentially saving American businesses and consumers an estimated $15 billion per year. This act comes as a response to Visa and Mastercard’s reported plans to increase credit card swipe fees by more than $500 million beginning next month.
Swipe Fees Continue to Increase
“Despite the nearly $100 billion Visa and Mastercard took out of communities and small businesses across the country last year, guess what they’re going to do in October? They’re going to raise the interchange fee again,” Senator Richard Durbin, D-Ill., said during a Senate floor session. “While we’re trying to fight inflation from every angle that we can find to bring down the cost of groceries and gas, the credit card companies have decided it’s just the right time to have this take-it-or-leave-it fee increase. When credit card fees go up, it increases inflation and consumers pay it.”
Swipe fees are most merchants’ highest costs after labor and drive up prices paid by consumers by more than $1,000 a year for the average family. U.S. retailers and merchants pay the highest swipe fees in the industrialized world — $126.4 billion in swipe fees were paid by businesses for credit card transactions in 2022, a 20% increase from the previous year, according to NRF.
NRF’s survey also found:
- 81% of consumers support federal legislation that would allow for greater competition to lower credit card fees for small businesses.
- 73% of consumers say they trust small businesses over large institutional banks when it comes to advocating for policies that impact consumers.
“Rising credit card swipe fees are hidden taxes on small businesses and consumers,” NRF Senior Vice President of Government Relations David French said in a press release. “It’s time for Congress to pass the Credit Card Competition Act.”