Sen. Marshall Visits Kansas QuikTrip, Talks Swipe Fees

The senator also hosted a roundtable discussing the bipartisan Credit Card Competition Act.

August 29, 2022

WICHITA Kan.—Merchants from across Kansas met with Senator Roger Marshall (R-KS) last Friday to emphasize how lack of competition over credit card processing drives up prices paid by consumers and thanked him for introducing the bipartisan Credit Card Competition Act.

Marshall hosted a roundtable with a number of Kansas retailers to discuss the bill he introduced, and the meeting was followed by a NACS In Store visit to a QuikTrip location where he worked behind the counter.

“It just amazes me, a convenience store like this one, is that they're paying more for swipe fees than they are for utilities,” said Marshall during his QuikTrip visit, reports

“Kansans and other Americans pay the highest ‘swipe’ fees in the industrialized world, and lack of competition is the reason why,” said Anna Ready Blom, NACS director of government relations and Merchants Payments Coalition Executive Committee member. “These fees drive up prices paid by consumers, and Visa and Mastercard have refused to hold off on increases despite raging inflation. This legislation is carefully crafted to apply only to giant Wall Street banks and would have no impact on community banks or credit unions in Kansas. Consumers’ credit card rewards would be protected since banks, not processing networks, issue those rewards. And security would be enhanced because independent networks have less fraud and networks backed by foreign governments like China’s Union Pay would be barred from entering the U.S. market,” she said.

“This bill is a win for everybody except the largest big-city banks that have profited off small businesses and consumers across America for far too long,” Blom said.

Blom was one of about 20 merchants and trade association executives who met with the Republican senator at the district office of the Dillons supermarket chain in Wichita. The roundtable included retailers, restaurants, grocers, convenience store owners and fuel merchants, among others.

Marshall and Senate Judiciary Committee Chairman Richard Durbin (D-Ill.) joined together last month to introduce the Credit Card Competition Act. The action came three months after Visa and Mastercard refused a request from the two senators and other members of Congress to withdraw an increase in fees that the lawmakers said would add to inflationary pressures.

The bill is aimed at swipe fees averaging more than 2% of the transaction that banks and payment networks like Visa and Mastercard charge merchants to process credit card transactions. Credit and debit card swipe fees have more than doubled over the past decade, soaring 25% last year alone to a record $137.8 billion. They are most merchants’ highest cost after labor and drive up consumer prices by about $900 a year for the average family.

Swipe fees remain one of the highest operating costs for convenience store retailers after labor, according to NACS State of the Industry data. In 2021, overall card fees paid by the convenience store industry were $13.5 billion, up 25.6% in 2021 versus 2020 ($10.7 billion), NACS SOI data indicate.

Visa and Mastercard, which control more than 80% of the credit card market, restrict processing to their own networks and set the fees the banks charge, prohibiting competition among those banks and blocking innovative independent payment networks that offer both lower fees and better security.

To address the issue, the legislation would require that credit cards issued by the nation’s largest banks be enabled to be processed over at least two unaffiliated networks—Visa or Mastercard plus an independent network such as NYCE, Star or Shazam. Domestic credit card networks like American Express or Discover could also be the second network, but not networks supported by foreign governments like China’s Union Pay. Merchants would be allowed to choose which of the two networks to use, meaning networks would have to compete on pricing, security and service.

The bill would apply only to financial institutions with at least $100 billion in assets—fewer than three dozen institutions nationwide but 90% of Visa and Mastercard credit card volume—and would have no impact on small community banks or small credit unions.