Visa and Mastercard urge not to raise credit card swipe fees for small businesses

The National Retail Federation has added its vote to those of both sides of Congress by urging Visa and Mastercard to cancel credit card swipe fee increases.

Visa and Mastercard urge not to raise credit card swipe fees for small businesses

The swipe fee hike is set to take effect this month, but a letter from both Republican and Democratic members of Congress has criticized the move. The united members of Congress believe the higher rates will increase inflation and have “urgently urged” the credit card giants to abandon their plans.

Sweeping Costs Affecting Small Businesses

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

Congress notes that such fees are ultimately passed on to consumers in the form of increased prices, with each increase only making things harder for the average American family.

Raising Sweeping Costs ‘Insult for Injury’

The National Retail Federation’s vice president for Government Relations, Banking and Financial Services, Leon Buck, said: “U.S. consumers are grappling with the worst inflation in four decades and these increases would only make things worse. Sweeping costs are a percentage of the transaction, so banks and card networks are already receiving an undeserved windfall as they piggyback on higher prices, they will see billions of dollars more in revenue this year, even if the rates stay the same, so an increase would only make matters worse.

“Senators and representatives from both sides of the aisle coming together to address this issue demonstrate that Congress recognizes the impact these fees have on the small businesses and consumers they represent,” Buck said. “These fees drive up prices for consumers and impact shoppers in every congressional district and state in the country. We stand with lawmakers willing to side with Main Street over Wall Street.”

Visa and Mastercard urge congress to play ‘constructive role’

The letter from both sides of Congress denounced Visa and Mastercard, criticizing the swipe fee hike, but also urging the two credit card giants to try instead to have a positive impact on the economy. The letter read: “Visa and Mastercard could actually play a constructive role in reducing inflation by cutting [the] interchange fees, which are currently much higher than what we would see in a competitive market environment rather than the current duopoly.”

Congressmen also pointed out that the profits of both credit card companies are already in good health. The letter continued, “As Americans face the highest inflation in decades, your profits are already high enough and any further increase in compensation is simply taking advantage of vulnerable Americans.”

Image: Depositphotos

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