Holiday Shopping Could Cost Consumers $20 Billion

The average family will spend $20 on swipe fees this holiday season.

December 12, 2023

Rising swipe fees banks charge merchants to process credit card transactions could cost consumers nearly $20 billion–and maybe more—this holiday season, according to the Merchants Payments Coalition (MPC).

Consumers are expected to spend an average $875 during the November-December holiday season for a total as high as $966.6 billion, according to National Retail Federation (NRF). Based on the average 2.24% rate for Visa and Mastercard, that would include about $20 in swipe fees for the average family—enough to buy a Barbie doll or Lego set, the two most-wanted holiday toys, or a ham or turkey for a holiday dinner.

Total figures are difficult to calculate because not all purchases are paid for with credit cards. But independent payments consulting firm CMSPI estimates that about 80% of holiday purchases will be made with credit or debit cards or digital wallets this year and that swipe fees will total at least $18.6 billion even after allowing for cash purchases. That’s up from $18 billion last year. If all purchases were made with cards, swipe fees would total $26 billion, according to CMSPI.

With either figure, swipe fees are most merchants’ highest operating cost after labor throughout the year, driving up the prices they charge their customers. Swipe fees are up 50% since the pandemic and hit a record $160.7 billion last year, costing the average family over $1,000 a year.

“After a year of high inflation, the last thing consumers need is high credit card fees that make holiday purchases from toys to Christmas trees more expensive,” said Stephanie Martz, MPC executive committee member and National Retail Federation chief administrative officer and general counsel said. “Swipe fees charged by banks drive up the cost of everything Americans buy during the holidays and only Scrooge would think that’s fair as many families struggle to put smiles on children’s faces. It’s time to put Santa ahead of the Grinch and pass legislation to bring these fees under control.”

The impact of swipe fees comes as Congress is considering the Credit Card Competition Act (CCCA). First proposed last year, the CCCA was reintroduced in June by Senators Richard Durbin (D-IL), Roger Marshall (R-KS), Peter Welch (D-VT) and J.D. Vance (R-OH), along with Representatives Lance Gooden (R-TX), Zoe Lofgren (D-CA), Thomas Tiffany (R-WI), and Jefferson Van Drew (R-NJ).

NACS members are encouraged to reach out to their members of Congress and ask that they support the Credit Card Competition Act. NACS makes it easy for retailers and suppliers to send a message to their legislators via the NACS Grassroot Portal.