Retailers claim credit card swipe fees are driving inflation [View all]
Source: Scripps News
Posted 2:30 PM, Nov 23, 2024
Although inflation has eased since peaking in 2022, retailers say that credit card swipe fees are not helping to lower inflation. The National Retail Federation sent a letter this week to the Senate Judiciary Committee urging congressional action to limit credit card swipe fees.
What are swipe fees?
For every transaction involving a credit card, a business is charged a fee. A congressional reportsuggests that in 2022, credit card companies collected $160 billion in swipe fees. The report indicates that credit card companies generally take around 2% of a transaction.
One reason for this is far more transactions are performed by using credit cards. In 2015, there were 33.7 billion credit card transactions that accounted for $3.05 trillion in sales. By 2021, that number increased to 51.1 billion transactions accounting for $4.88 trillion.
Another reason swipe fees are increasing is credit card companies are in an arms race to offer their customers rewards, such as airline miles, gift cards and cash back. While credit card companies have other forms of income from customers who carry balances, such as late fees and interest, transaction swipe fees are a way for companies to compensate customers who take advantage of cash-back offers but don’t carry a balance.
Read more: https://www.scrippsnews.com/life/money/retailers-claim-credit-card-swipe-fees-are-driving-inflation
Link to National Retail Federation PRESS RELEASE - Retailers Tell Senate Credit Card ‘Swipe’ Fees are ‘Adding Inflationary Pressure to the U.S. Economy’
Link to LETTER (PDF) - https://297051953189d612da9e-1e2a7931911c2abaf913026fb7c64860.ssl.cf1.rackcdn.com/Advocacy/Pass%20CCCA/NRF-SwipeHearing-2024-11-19-Final.pdf
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