NGA welcomes legislative opposition to credit card fee hike

In a letter to legislative leaders on Wednesday, National Grocers Association (NGA) President and CEO Greg Ferrara thanked U.S. Senate Majority Whip Dick Durbin (D-IL), U.S. Senator Roger Marshall (R-KS) and U.S. Representatives Peter Welch. (D-VT) and Beth Van Duyne (R-TX) for their bipartisan and bicameral efforts to implore Visa and Mastercard to waive planned April 2022 swipe fee rate increases for merchants.

Last Friday, Senators Durbin and Marshall and Representatives Van Duyne and Welch sent a letter to Visa and Mastercard asking them to withdraw their intention to implement a set of swipe fee increases this month. The estimated $1.2 billion increases were due to take effect in April 2021, but were delayed for a year after Durbin and Welch said they were untimely as the economy struggled to recover from the pandemic.

Higher costs are “the last thing American families deserve right now,” says a letter signed by lawmakers.

“As Americans face the highest rate of inflation in decades, your profits are already high enough, and any further fee increases simply benefit vulnerable Americans,” the letter said. “Raising your interchange fee rates even further will no doubt increase the already high costs consumers face and add to inflationary pressure, which is the last thing American families deserve right now.”

In her letter of support to lawmakers, Ferrara wrote, “Independent grocers are doing all they can to absorb sweeping fees, the competitive nature of the grocery industry demands, but absorbing these runaway increases just isn’t sustainable for all businesses. , especially small businesses. This means that some amount is passed on to consumers in the form of higher prices. Whether they have a credit card or not, the average American family already pays more than $700 a year in swipe fees.

“Your letter to the card networks echoes the concerns independent grocers have been hearing for months from consumers in the communities they serve,” he continued. “Food inflation is at its highest level in 40 years, and one of the most common places Americans notice these price increases is at the grocery store. At a time when the supply chain and communities are facing increased costs, the last thing grocers or their customers need is increased swipe fees.”

“Absorbing these runaway increases is simply not viable for businesses, especially small businesses.” — Greg Ferrara, President and CEO, National Grocers Association

NGA noted that grocers and independent merchants paid more than $100 billion in swipe fees to accept credit cards in 2021, according to the Nilson report. “The anti-competitive duopoly of Visa and Mastercard has allowed these networks to raise swipe fees on an annual basis for decades with no ability for grocers or other Main Street businesses to affect those costs,” said association.

Ferrara also called on Congress and the Biden administration to address market failures and lack of competition that have allowed card networks to “take advantage of American consumers and Main Street businesses,” noting that swipe fees United States are higher than any other country in the industrialized world.

The National Retail Federation (NRF) has also urged Visa and Mastercard to reverse planned fee increases.

“American consumers are grappling with the worst inflation in four decades and these increases would only make the situation worse,” said Leon Buck, NRF vice president for government relations, banking and financial services. “The swipe fee is a percentage of the transaction, so banks and card networks are already receiving an undeserved windfall by taking advantage of higher prices. They’re going to see billions of dollars in additional revenue this year even if the 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 of these fees on small businesses and the consumers they represent,” Buck said. “These fees drive up prices for consumers and affect shoppers in every congressional district and state across the country. We support lawmakers who are willing to side with Main Street over Wall Street. »

The Merchants Payments Coalition (MPC) also welcomed the lawmakers’ letter, agreeing that the increases would drive up prices paid by consumers already facing high inflation.

“It is very significant that lawmakers from both parties and both houses of Congress have come together to stand up against the global card giants to protect small businesses and consumers,” said executive committee member Anna Ready Blom. of the MPC and Director of Government Relations. for the National Association of Convenience Stores. “It shows that this is an issue that crosses political lines. This is the card industry that continues to profit off the backs of Main Street merchants and hard-working American families at a time when they can least afford it.

According to a report this week in the Wall Street JournalVisa and Mastercard said the swipe fee helps businesses cover costs related to innovation and fraud prevention.

“Electronic payments play a vital role every day and have proven even more valuable since the start of the pandemic,” a Mastercard spokesperson told the Journal. “And that’s why we see merchants encouraging their customers to use electronic payment methods because of the significant value they receive in return – a safe and convenient experience and guaranteed payment.”

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