The National Retail Federation has added its voice to those on both sides of Congress in urging Visa and Mastercard to reverse credit card swipe fee increases.
Visa and Mastercard urged not to increase credit card swipe fees for small businesses
The sweep fee increase is expected to go into effect this month, but a letter from Republican and Democratic members of Congress criticized the move. United members of Congress believe the higher fees will contribute to inflation and have “strongly urged” the credit card giants to drop their plans.
Sweeping fees affecting small businesses
Swipe fees currently average just over 2% of the transaction amount for Visa and Mastercard credit cards. Most small business owners already cite fees as their highest operating cost after paying staff.
Congress notes that these fees end up being passed on to consumers in the form of increased prices, with any increases only making it harder for the average American family.
Sweeping fees rise adding ‘insult to injury’
The Vice-President of Government Relations, Banking and Financial Services for the National Retail Federation, Leon Buck, said, “American consumers are grappling with the worst inflation in four decades and these increases would only make matters worse. The swipe fee is a percentage of the transaction, so banks and card networks are already receiving an undeserved windfall by taking advantage of higher prices. They are going to see billions of dollars in additional revenue this year even if the rates remain the same, so an increase would only add insult to injury.
“Senators and Representatives from both sides of the aisle coming together to address this issue shows that Congress recognizes the impact of these fees on small businesses and the consumers they represent,” Buck said. “These fees drive up prices for consumers and affect shoppers in every congressional district and state across the country. We support lawmakers who are willing to side with Main Street over Wall Street. »
Visa and Mastercard urged to play ‘constructive role’ by Congress
The letter from both sides of Congress took issue with Visa and Mastercard, criticizing the swipe fee hike, but also urging the two credit card giants to try to make a positive impact on the economy instead. The letter said, “Visa and Mastercard could actually play a constructive role in reducing inflation by reducing [the] interchange fee rates, which are currently much higher than what we would see in a competitive market environment instead of the current duopoly.
Members of Congress also pointed out that the profits of the two credit card companies are already healthy. The letter continued, “As Americans face the highest rate of inflation in decades, your profits are already high enough and any further fee increases simply benefit vulnerable Americans.”