New data from payments consulting firm CMSPI reveals that credit and debit card swipe fees charged by big banks and card networks reached a staggering $224 billion in 2023, a figure nearly 30% higher than previous estimates. The report, welcomed by the Merchants Payments Coalition (MPC), underscores the growing burden these fees place on small businesses and consumers. Jennifer Hatcher, Chief Public Policy Officer for FMI and MPC Executive Committee member, emphasized the need for Congress to introduce competition into the payments market to curb the rise in fees.
Visa and Mastercard swipe fees averaged 2.94% per transaction, significantly higher than previously reported. These fees, often the second-largest cost for retailers after labor, contribute to increased prices for consumers—estimated at around $1,700 annually for the average family. The Credit Card Competition Act, currently under congressional consideration, aims to reduce these fees by mandating that major banks offer alternative processing networks, which could save merchants and consumers $16 billion annually.
As swipe fees continue to escalate, this new data highlights the critical need for legislative action to introduce competition and lower costs for businesses and consumers alike.
