The Merchants Payments Coalition (MPC) maintains increasing swipe fees banks and credit card networks charge merchants to process transactions could cost consumers nearly $800 million this Mother’s Day.
“Everything from greeting cards and flowers to dining out and jewelry will cost more this Mother’s Day because swipe fees drive up prices,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “Motherhood is a sacred institution to most Americans, but for the credit card industry, it’s just another opportunity to take an inflated percentage of every sale.”
According to MPC estimates, $6.14 per shopper will go to banks and card networks through credit card swiping fees rather than the merchant when customers pay by credit card. MPC added that if all Mother’s Day purchases were made with credit cards, swipe fees would account for $799.7 million of the total.
“It’s time for Congress to bring competition to the payments market by passing the Credit Card Competition Act,” Kantor said.
Proponents of the measure introduced by Sens. Richard Durbin (D-IL) and Roger Marshall (R-KS) indicated it would require banks with over $100 billion in assets to enable credit cards to be processed over at least two unaffiliated networks – one could still be Visa or Mastercard, but the other would be a competing network such as NYCE, Star or Shazam.
Banks would choose which two to enable, but merchants would choose which to use, forcing networks to compete over fees, security, and service.
MPC cited payments consulting firm CMSPI estimates competition would save businesses and consumers at least $11 billion annually.