FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 craig@shearmancommunications.com
Average Swipe Fees Equal a Greeting Card or 2-3 Pieces of Chocolate
WASHINGTON, January 30, 2025 – Rising swipe fees banks charge merchants to process credit and debit card transactions could cost consumers well over $600 million in higher prices for Valentine’s Day this year, the Merchants Payments Coalition said today.
“Valentine’s Day is one of the most popular holidays for loved ones to enjoy a fancy meal out on the town or a romantic meal at home, but swipe fees drive up the cost of everything for couples celebrating this special day,” MPC Executive Committee member and National Restaurant Association Director of Technology and Innovation Policy Brennan Duckett said. “Giant Wall Street banks shouldn’t force you to take them along as an awkward third wheel in your special moments. They are making record profits by charging these huge hidden fees. It’s not fair and it’s time for Congress to pass the Credit Card Competition Act.”
Consumers are expected to spend an average $188.81 on Valentine’s Day items such as candy, flowers, jewelry, greeting cards and evenings out this year for a total of $27.5 billion, according to the National Retail Federation’s annual survey. Based on the average 2.26% rate for Visa and Mastercard, that would include an average $4.27 in swipe fees – as much as a typical Valentine’s greeting card or two or three pieces of chocolate from a mid-range gift box – and would add up to $621.5 million if all purchases were made with credit cards. With swipe fees constantly rising, that’s up from $577.9 million last year.
Valentine’s Day spending will give banks and card networks a lucrative profit boost as they take a percentage of each purchase made with a card. A $160 “Classic Love” red rose bouquet can include $3.62 in swipe fees. The swipe fees on a $65 box of chocolates amount to $1.47. A $200 dinner for two can run over $5 for swipe fees on the meal and tip, and a $50 bottle of wine or champagne adds another $1 in swipe fees.
The biggest swipe fee cost can come for couples who get engaged on the special day. BRIDES magazine says couples spend an average $6,000 on a one-carat natural diamond engagement ring, which would include a swipe fee of $135.
By category, swipe fees could account for $146.9 million of the $6.5 billion consumers are expected to spend on jewelry, $122 million of $5.4 billion spent on evenings out, $65.5 million of $2.9 billion spent on flowers, $56.5 million of $2.5 billion spent on candy and $31.6 million of $1.4 billion spent on greeting cards.
Exact figures are difficult to calculate because not all purchases are paid for with credit cards. But about 75% of in-person purchases are made with plastic, according to the Federal Reserve, and card industry rules make cash discounts difficult. Online, nearly all purchases are paid for by debit or credit card, and swipe fees are even higher for virtual payments than in-store payments – including restaurant take-out orders paid for online. (Three-quarters of restaurant orders are consumed elsewhere.)
Credit and debit card swipe fees – which have risen 50% since the pandemic and reached a record $172 billion in 2023 – are most merchants’ highest operating cost after labor. The fees are too high to absorb, especially for small merchants, and drive up consumer prices over $1,100 a year for the average family.
The impact of swipe fees comes as Congress is considering the Credit Card Competition Act. Under the bill, banks with at least $100 billion in assets would be required to enable credit cards to be processed over at least one unaffiliated network like Star, NYCE or Shazam in addition to Visa or Mastercard. The measure is expected to result in competition over fees, security and service that would save merchants and their customers over $16 billion a year. Visa and Mastercard currently control over 80% of the credit card market and each centrally sets the swipe fee rates charged by all banks issuing cards under their brands. Each also restricts transaction processing to its own network.
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. Follow MPC on Twitter, Facebook or LinkedIn for the latest on swipe fees.