Credit Card Fees Could Swipe a Dozen Easter Eggs and Cost Consumers Over $500 Million

Contact: J. Craig Shearman
(202) 257-3678

WASHINGTON, March 27, 2023 – Rising “swipe” fees big banks and credit card networks charge merchants to process transactions could cost the average consumer the equivalent of a dozen eggs this Easter and potentially total over half a billion dollars nationwide, the Merchants Payments Coalition said today.

“The card industry will be putting its hand in the Easter basket again this year as rising swipe fees contribute to the cost of everything from Peeps to chocolate bunnies,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “These fees make inflation even worse at a time when parents and the Easter Bunny can least afford it. And the problem won’t end when Easter is over because swipe fees drive up prices for consumers all year long. The card industry refuses to stop price-fixing these fees and compete, so it’s time for Congress to act. If children can compete at an Easter egg hunt, why can’t card networks compete when it comes to setting swipe fees?”

The National Retail Federation’s annual survey estimates that consumers will spend an average $192.01 on Easter-related items this year for a total of $24 billion.

Based on the 2.24 percent average swipe fee for Visa and Mastercard credit cards, $4.30 per shopper will go to banks and card networks rather than the merchant when customers pay by credit card. That’s just above the $4.21 average price for a dozen eggs, and also more than a typical $3.74 package of Easter egg dye, a $3.49 hollow chocolate bunny, a $3 bamboo Easter basket or three $1.36 10-count packs of Peeps.

If all Easter purchases were made with credit cards, swipe fees would account for $537.6 million of the total. The actual amount is difficult to calculate because purchases are split between credit cards and debit cards, which have a lower swipe fee, and some are made with cash. But cash accounted for only 19 percent of purchases in 2021, according to the Federal Reserve, and its use is rapidly declining as more spending moves online and more consumers use plastic for in-store purchases.

Credit and debit card swipe fees have more than doubled over the past decade and soared 17 percent last year alone to a record $160.7 billion, according to the Nilson report. They are most merchants’ highest operating cost after labor and are too much to absorb, driving up prices paid by the average family by an estimated $1,024 last year.

The impact on Easter comes as Senators Richard Durbin, D-Ill., and Roger Marshall, R-Kan., are preparing to reintroduce the Credit Card Competition Act. First introduced last year, the legislation would require that banks with over $100 billion in assets enable credit cards to be processed over at least two unaffiliated networks. One could still be Visa or Mastercard but the other would be a competing network such as NYCE, Star or Shazam. Banks would choose which two to enable but merchants would choose which to use, forcing networks to compete over fees, security and service. Payments consulting firm CMSPI estimates that competition would save businesses and their customers at least $11 billion a year.

Visa and Mastercard – which control 80 percent of the market – currently price fix the swipe fees charged by banks that issue cards under their brands rather than the banks competing to offer merchants the best deal. They also block competition by restricting processing to their own networks even though most competing networks charge lower fees and, according to the Federal Reserve, have less fraud.

About MPC
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants.