The Merchants Payments Coalition (MPC) warns that rising swipe fees charged by big banks and credit card networks for processing transactions may cost consumers nearly $800 million this Mother’s Day.
“Swipe fees drive up prices on everything from greeting cards and flowers to dining out and jewelry, especially since they compound the impact of inflation,” said MPC Executive Committee member Doug Kantor. He urged Congress to pass the Credit Card Competition Act, which would introduce competition to the payments market.
The National Retail Federation’s annual survey shows consumers plan to spend an average of $274 per person for Mother’s Day, totaling $35.7 billion. MPC estimates that $6.14 per shopper will go to banks and card networks instead of merchants when customers pay by credit card, based on a 2.24% average swipe fee for Visa and Mastercard.
If all Mother’s Day purchases were made with credit cards, swipe fees would account for $799.7 million of the total. However, the actual amount is challenging to calculate since purchases are split between credit cards, debit cards with lower swipe fees, and cash. Still, cash represented only 19% of purchases in 2021, and its usage continues to decline.
Credit and debit card swipe fees have more than doubled over the past decade, with a 17% increase last year alone, reaching a record $160.7 billion. The Credit Card Competition Act, pushed by Senators Richard Durbin and Roger Marshall, would require banks with over $100 billion in assets to process credit cards over at least two unaffiliated networks, fostering competition and potentially saving businesses and customers at least $11 billion a year.