Despite pleas from merchants, consumers and small businesses, Visa and Mastercard have given no indications they are pausing their planned increases on swipe fees scheduled to take effect in April, despite economic data showing consumers are battling inflation costs at 40-year highs and U.S. consumer sentiment near an 11-year low.
“It’s completely out-of-touch with economic conditions to raise fees on purchases consumers make with their credit cards,” said Austen Jensen, senior vice president, government affairs at the Retail Industry Leaders Association, RILA.“Retailers hoped the major card networks would realize the current economic situation exasperated by global uncertainty, supply chain disruptions, talent shortages, and 40-year high inflation would convince Visa and Mastercard to pause the unnecessary and exorbitant fee increases. Unfortunately, the card networks have said nothing publicly that indicates they might halt these massive additional costs on American businesses and consumers.”
Merchants are advocating the card networks recognize that many retailers, restaurants, and small businesses are still grappling with pandemic related disruptions, now combined with record high inflation. Gouging merchants and consumers with higher costs is unnecessary and will only lead to even higher prices for consumers.
The total impact of these changes is estimated at $475 million in annual increases. U.S. merchants paid card issuers an estimated $55.4 billion in Visa and Mastercard credit-card interchange fees in 2021, more than double the amount paid in 2012, according to the Nilson Report.
“The data makes crystal clear that hiking these fees is not a business necessity for the dominant card networks, its simply an attempt to pile on another cost in the hope nobody will notice. These fees will add to the inflationary pressure facing retailers, restaurants and every other business that accepts credit cards, and the impact will primarily be borne by those who can least afford it,” Jensen said.
RILA is the US trade association for leading retailers. We convene decision-makers, advocate for the industry, and promote operational excellence and innovation. Our aim is to elevate a dynamic industry by transforming the environment in which retailers operate.
RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs, and more than 100,000 stores, manufacturing facilities, and distribution centers domestically and abroad.