The Merchants Payments Coalition (MPC) is urging the Consumer Financial Protection Bureau (CFPB) to address the root causes of cash-back fees in small towns, attributing them to high swipe fees set by banks and the lack of banking services in these areas.
A recent CFPB report revealed that while most merchants offer cash-back at no charge, some charge fees due to the exorbitant costs imposed by credit card companies and unregulated small banks. These fees, which can reach $3 for every $100 given as cash back, contrast sharply with the modest 50 cents to $1 fees merchants typically charge customers. The MPC argues that the real issue lies in the banking and credit card industries, whose rising swipe fees have doubled over the past decade, significantly increasing costs for consumers.
The CFPB report coincides with Congress’s consideration of the Credit Card Competition Act, which aims to reduce swipe fees by introducing more competition among payment networks, potentially saving consumers and merchants $16 billion annually.
