Swipe Fees Cost Each Consumer 2 Dozen Easter Eggs

Consumers will spend an average of $169.79 on Easter-related items this year for a total of $20.8 billion.

March 29, 2022

Easter Eggs

WASHINGTON—Credit card swipe fees could cost the average consumer the equivalent of two dozen eggs this Easter and total hundreds of millions of dollars nationwide, according to the Merchants Payments Coalition (MPC). NACS is a member of the MPC.

“Banks and card companies will be grabbing eggs out of the Easter basket again this spring through the rising fees they charge to process credit card transactions,” said Leon Buck, MPC executive committee member and National Retail Federation vice president for government relations, banking and financial services. “This isn’t just about Easter—swipe fees drive up prices for consumers all year long, even when they don’t use a credit card. It’s time for the card industry to stop price-fixing these fees and compete to offer merchants and consumers the best deal.”

NRF’s annual survey estimates that consumers will spend an average $169.79 on Easter-related items this year for a total of $20.8 billion.

Based on the 2.22% average swipe fee for Visa and Mastercard credit cards, $3.77 of the average Easter spending amount will go to banks and card networks rather than the merchant when customers pay by credit card. With eggs averaging $1.79 a dozen last year, that’s the equivalent of more than two dozen eggs or three packages of Easter egg dye.

If all Easter purchases were paid with credit cards, swipe fees would account for $461.8 million of the total. Cash accounted for only 23% of purchases in 2020, according to the Federal Reserve, and its use is rapidly declining as more spending has moved online during the pandemic and consumers have shifted to cards even for in-person purchases.

Swipe fees leave merchants with less than 98 cents on the dollar when credit cards are used. They are most merchants’ highest cost after labor and drive up prices even when consumers pay with cash. Swipe fees for Visa and Mastercard credit cards alone 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. The fees amount to an estimated $724 a year for the average U.S. family.

In the U.S., credit card swipe fees remain one of the highest operating costs for convenience store retailers after labor, according to NACS State of the Industry data. Consumer preferences for more touch-free transactions and the coin circulation challenge in summer 2020 led to record debit and credit card usage at convenience stores. In 2020, 74.6% of all transactions were paid by plastic, and overall card fees paid by the convenience store industry were $10.7 billion, NACS SOI data indicate.

The fees will soon get higher, with Visa and Mastercard scheduled to complete implementation of $1.2 billion in increases in April.

About 80% of the credit card market is controlled by Visa and Mastercard, and earlier this month MPC called on Congress to investigate their dominance and the impact of their fess on inflation.

As prices go up with inflation, swipe fees increase proportionately, creating a multiplier effect and giving banks and card networks an unearned windfall even if their rates remain the same.

Visa and Mastercard swipe fees are set centrally by the two card networks, and the banks that issue their cards all charge the same rather than competing with each other to offer lower fees. Merchants have argued in court and before Congress that the practice violates federal antitrust law.

The Merchants Payments Coalition has called on Congress to investigate Visa and Mastercard’s anticompetitive dominance over the U.S. credit and debit card markets.

The MPC 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.

NACS is actively advocating on the convenience and fuel retailing industry’s behalf against outrageous swipe fees. Read more about NACS advocacy efforts regarding swipe fees.