NRF: Mastercard, Visa Should Cancel Credit Card Swipe Fee Increases
The National Retail Federation (NRF) has joined bipartisan U.S. lawmakers in calling for Mastercard and Visa to hold off on their planned credit card swipe fee increases, which are scheduled to go into effect later this month, according to a Monday (April 18) press release.
In a letter last week to Mastercard and Visa, Democratic and Republican members of Congress said the increased swipe fees would add to the already-escalating inflation levels.
“American consumers are struggling under the worst inflation in four decades, and these increases would only make the situation worse,” said NRF Vice President for Government Relations, Banking and Financial Services Leon Buck in the release. “… [Banks and credit card networks are] going to see billions of dollars more in revenue this year even if rates stay the same...”
Sens. Roger Marshall of Kansas and Richard J. Durbin of Illinois, and Reps. Beth Van Duyne of Texas and Peter Welch of Vermont asked for another delay in implementing the higher fees — estimated to total $1.2 billion — after they were originally scheduled to take effect in April 2021, the release stated.
“[Y]our profits are already high enough, and any further fee increase is simply taking advantage of vulnerable Americans,” the letter stated.
“Raising your interchange fee rates even higher will undoubtedly increase the already high costs consumers are facing and add to inflationary pressure,” it also said.
Seth Eisen, senior vice president of communications at Mastercard, said the swipe fee increases “are the first such changes in more than a decade.”
“Our changes include some increases and some decreases,” he said in an email to PYMNTS. “For example, we’re decreasing costs for all merchants with transactions below $5. As people are living increasingly on-the-go digital lives, we’re looking to help support merchants in providing their customers the best choices and shopping experiences possible.”
Visa did not respond to PYMNTS’ request for comment.
Visa, Mastercard and the banks that issue their cards charged retailers $77.5 billion in credit card swipe fees last year and $28.1 billion in debit card swipe fees, according to the NRF release. Swipe fees for all types and brands of cards totaled $137.8 billion in 2021, more than double the amount 10 years earlier.
Most of the planned increases will come from higher interchange fees, which are paid by merchants to the card-issuing banks when shoppers use cards.
Read more: Mastercard, Visa Prep Fee Hike for April