March 03, 2021
FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 email@example.com
WASHINGTON, March 3, 2021 – The Merchants Payments Coalition welcomed a letter sent today by Senator Richard J. Durbin, D-Ill., and Representative Peter Welch, D-Vt., calling on Visa and Mastercard to cancel a nearly $1.2 billion increase in credit card processing fees scheduled to take effect in April.
“These increases would come at the worst possible time,” MPC Counsel Doug Kantor said. “Merchants have been struggling for a full year to survive the economic impact of the pandemic and cannot afford an unnecessary and avoidable cost increase. U.S. credit card swipe fees are already among the highest in the world, and now is not the time to increase them.”
“Just as increased vaccination efforts start to give our Main Street business hope for a summer reopening, your companies propose slamming struggling merchants, and by extension consumers, with fee increases,” Durbin and Welch said in the letter. “Raising your fees would undermine efforts to help the economy recover and further reduce Americans’ purchasing power.”
Visa and Mastercard are reportedly set to implement a wide-ranging restructuring of the “swipe” fees banks charge merchants to process credit card transactions beginning in April. While the matrix of fees is complex, the net impact is estimated at increases of $768 million a year for Visa and $383 million for Mastercard, or a total of $1.15 billion, according to analysis by global payments consulting firm CMSPI. Increases are expected for Visa and Mastercard’s most prominent credit card programs, and for online transactions, which have grown sharply during the pandemic and already carry higher fees than in-store transactions. Not only do online transactions come with higher fees, but merchants also shoulder a vast majority of fraud costs online.
Swipe fees vary widely according to type of card, type of transaction and size of merchant, but average 2.25 percent of the transaction amount for Visa and MasterCard credit cards, according to the Nilson report, a trade newsletter that follows the card industry. The fees have increased dramatically in recent years, more than doubling from $25.6 billion a year in 2009 to $67.6 billion in 2019 for Visa and MasterCard credit cards alone, according to Nilson. Overall processing fees paid by U.S. merchants to accept all card payments totaled $116.4 billion in 2019, up 88 percent over the previous decade.
The fees are among most merchants’ highest costs after labor and drive up prices for goods and services paid by the average U.S. family by hundreds of dollars a year.
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.