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Concerned about rising costs of swipe fees


To the editor:

My name is Jon McCormick with the Retail Grocers Association of Kansas and Missouri, which represents almost 400 grocery and convenience stores in Kansas and Missouri. Our M\members are in the business of putting food on their customers’ tables and do the same for their hard-working employees who count on their stores for their livelihood.

I am concerned about an issue that affects all small businesses, our members, and their customers across Kansas and Missouri – skyrocketing “swipe” fees that the big banks and global card networks charge to process credit card transactions.

Swipe fees skim over 2% off of each transaction and leave merchants with less than 98 cents on the dollar. The amount that the credit cards take is well more than the average 1% profit margin in the grocery industry, meaning that banks and card networks make more money on a bag of groceries than Supermarket Retailers do.

Swipe fees are the highest operating cost for grocery stores, after labor, and drive up prices for customers. They have been rising for years and soared by 25% last year to a record $137.8 billion when debit cards are included — about $900 for the average family. (And check out their CEOs’ salaries!)

Worse yet, as a percentage of the transaction, the amount collected on swipe fees automatically increases as prices go up, creating a multiplier effect that costs consumers even more in these times of near-record inflation. When prices go up 10%, they get 10% more in their fees. Sweet deal! For them!

The fees have skyrocketed for decades because of lack of competition: Visa and Mastercard — which control 80% of the market — centrally price-fix swipe fees charged by the banks that issue their cards, and also have a monopoly on the processing of transactions made with their cards.

Fortunately, Congress is taking a close look at these fees. Senator Roger Marshall (R-Kansas) stood up for businesses and consumers this spring by asking Visa and Mastercard to withdraw a $1.2 billion increase planned for April, saying it would increase inflation. Visa and Mastercard refused, but the Senate responded with a hearing where their executives were questioned about price fixing and other anticompetitive practices.

Senator Marshall should be commended for standing up against big business monopolies like Visa/MC. I am grateful he is looking to find a solution that will bring competition to the credit card market and keep the card industry from artificially driving up the price of food on American families’ tables. I look forward to seeing the results of his efforts in the endeavor to help the everyday American family.

Your readers should contact their representatives in Washington, D.C., and tell them to act on bringing down the high price of swipe fees.

Jon McCormick
Retail Grocers Association of Missouri and Kansas

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