Friday, August 12, 2022
Home Business tips Visa and Mastercard Urged to Not Increase Credit Card Swipe Fees on...

Visa and Mastercard Urged to Not Increase Credit Card Swipe Fees on Small Business

The National Retail Federation has added its voice to those from both sides of Congress in urging Visa and Mastercard to cancel increases in credit card swipe fees.

Visa and Mastercard Urged to Not Increase Credit Card Swipe Fees on Small Business

The swipe fee raise is due to come into effect this month, but a letter from both Republican and Democratic members of Congress has criticized the move. The united members of Congress believe that the higher fees will add to inflation, and have ‘strongly urged’ the credit card giants to abandon their plans.

Swipe Fees Affecting Small Business

Swipe fees currently average a little over 2% of the transaction amount for both Visa and Mastercard credit cards. Most small business owners already cite the fees as their highest operating cost after paying staff.

Congress note that such fees end up being passed on to consumers in the form of raised prices, with any increase only going to make it harder for the average American family.

Swipe Fees Increase Adding ‘Insult to Injury’

The Vice President for Government Relations, Banking and Financial Services for the National Retail Federation, Leon Buck, said: “American consumers are struggling under the worst inflation in four decades and these increases would only make the situation worse. Swipe fees are a percentage of the transaction, so banks and card networks are already receiving an unearned windfall as they piggyback on higher prices. They’re going to see billions of dollars more in revenue this year even if rates stay 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 these fees are having on the small businesses and consumers they represent,” Buck said. “These fees drive up prices for consumers and affect shoppers in every congressional district and state in the country. We stand with lawmakers who are willing to take the side of 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 increase, but also urging the two credit card giants to try and have a positive impact on the economy instead. The letter read: “Visa and Mastercard could actually play a constructive role in reducing inflation by cutting [the] interchange fee rates, which are currently much higher than what we would see in a competitive market environment instead of the present duopoly.”

Congress members also pointed out that both credit card companies’ profits are already in fine health. The letter continued: “As Americans are dealing with the highest rate of inflation in decades, your profits are already high enough and any further fee increase is simply taking advantage of vulnerable Americans.”

Image: Depositphotos

Most Popular

Jamie Ellacott facing more sexual assault charges linked to Lethbridge gymnastics facility

Lethbridge police have laid additional charges of sexual assault against a local gymnastics coach. This time, they involve three more children who attended the...

Assiniboine Park releases more than 200 endangered butterflies

Assiniboine Park Conservancy has set a new record by releasing more than 200 endangered butterflies back into the Manitoba landscape. “We are thrilled with the...

Over 600 flights cancelled in the U.S. as thunderstorms hit Texas

Airlines canceled more than 600 flights in the United States on Thursday morning, as thunderstorms in Texas disrupted operations at one of the busiest...

‘Earthy or musty’ water still safe to drink, Durham Region says

Durham Region says the local water supply remains safe to drink despite “possible earthy or musty odours detected recently.” The region said in a post...