NYT Opinion Video Supports the Fight Against Swipe Fees

Also, Forbes clears up misconceptions about the CCCA.

November 29, 2023

The New York Times published an opinion video regarding credit card swipe fees and the Credit Card Competition Act (CCCA). The editorial supported the CCCA and encouraged its audience to support the legislation.

In the video, the Times explains how swipe fees often become operators’ biggest costs, causing them to raise prices for everyone to offset the expense. The video used a fictional store, MJ’s, to demonstrate how swipe fees work in stores.

“For small businesses like MJ’s, swipe fees can be one of their biggest expenses. And small stores like hers get charged higher rates than big-box competitors,” the video said. “In order to cope, store owners like MJ raised their prices. That means that all of us are paying more.”

The video stated that “in 2020, the Federal Reserve found that the average American at every income level loses more to swipe fee price hikes than they earn in rewards.”

“On average, [the poorest Americans] pay five times more in price mark-ups than they’ll ever receive in rewards,” the Times added.

At the end of the video, the Times said that the best deal for Americans does not come from a rewards program but instead from legislation, like the CCCA. The Times encouraged viewers to call their senators and support the CCCA, in addition to using cash to pay at small businesses to avoid incurring the swipe fee.

NACS General Counsel Doug Kantor discussed the CCCA and what it means for retailers and consumers with Forbes. During the interview, Kantor highlighted how swipe fees hurt store owners and shoppers while majorly benefiting the credit card companies, Visa and Mastercard.

“Even though the process has become more automated and cheaper for the card networks and banks, they are demanding more and more money to do the same thing. They currently charge merchants between 2% and 4% of the transaction every time a card is used,” Kantor said. “Swipe fees are now most merchants’ highest operating cost after labor. It’s far too much to absorb, so credit and debit card swipe fees drive up the prices that merchants have to charge by over $1,000 a year for the average family.”

Kantor stated that swipe fees are increasing “at a dizzying rate.” Since 2010, Visa and Mastercard swipe fees have more than tripled. Since the pandemic, the fees are up 50%. Swipe fees, across all brands of credit cards plus debit cards, increased over $22 billion to over $160 billion last year.

“The bottom line is that fees are going up so high and so fast because the market is broken. Visa and MasterCard set the banks’ prices. All the banks agree that they will charge merchants whatever Visa and MasterCard say—which means they don’t compete on price at all,” said Kantor.

Americans pay more for swipe fees than people anywhere else in the world. Kantor noted that “The European Union limits credit card swipe fees to 0.3% of the transaction, and everything works fine. Credit cards are widely available in Europe, rewards are still offered and banks still make a profit. We’re not asking for a cap in the United States, just competition.”

NACS encourages members 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.