Credit card swipe fees set for $1.2 billion increase

Marianne Wilson
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Visa and Mastercard are preparing to implement a $1.2 billion increase in swipe fees in April

A new advertising campaign looks to educate Congress and other policymakers on the impact high swipe fees have on consumers, small businesses and the U.S. economy.

The campaign, from the Merchants Payments Coalition, comes as Visa and Mastercard – which control nearly 80% of the U.S. credit card market – prepare to implement a $1.2 billionincrease in swipe fees in April. The increase was delayed from a year ago after members of Congress said it would “undermine efforts to help the economy recover.”

Swipe fees for Visa and Mastercard credit cards average 2.22% of the transaction amount and totaled $61.6 billion in 2020, up 137% over the previous decade, according to the Nilson Report. When all types and brands of cards are included, processing fees totaled $110.3 billion in 2020, up 70% over 10 years.

“Swipe fees charged in the United States are the highest in the industrialized world and a lack of competition, transparency and scrutiny has allowed them to get that high,” said Leon Buck, executive committee member, MPC, and National Retail Federation VP for government relations, banking and financial services. “These fees are largely hidden, even from those in power to do something about them. We want members of Congress to know how much money big banks and global card networks are taking out of their constituents’ pockets, and how these fees are harming small businesses across the nation.”

The six-figure campaign includes ads that will be featured in both social media and traditional media across Washington targeting members of the House and Senate and their staffs, and policymakers at agencies such as the Federal Reserve, Consumer Financial Protection Bureau, the Federal Trade Commission and the Department of Justice. The ads, which will run through this spring, direct readers and listeners to the MPC website at for more information.

Swipe fees mean merchants receive less than 98 cents on the dollar when customers pay by credit card, and merchants have to set prices higher to make up for the loss. For a $100 purchase, more than $2 goes to the card industry, and the fees equate to an estimated $724 a year for the average U.S. family, according to payments consulting firm CMSPI.

As prices rise with inflation, swipe fees go up proportionately because the percentage is based on a larger amount, giving even more to the card industry.

The fees have been a growing concern as consumers have shifted from cash to plastic during the pandemic, with the Fed saying cash accounted for only 23% of purchases in 2020, down from 32% just two years earlier in 2018, while credit and debit cards grew to 65% from 59% in the same period.

The Fed has proposed regulations clarifying that banks must enable all debit card transactions to be processed over at least one competing network such as NYCE, Star or Shazam in addition to Visa or Mastercard’s networks. Both the DOJ and FTC are investigating practices that often block merchants’ right to choose which network processes online debit transactions.

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.