How credit card swipe fees are affecting shoppers
Published On Jan 8, 2025, 7:00 AM
The article discusses the rising impact of credit card swipe fees on shoppers and retailers. With fees averaging over 2% per transaction and sometimes reaching 4% for premium cards, retailers are forced to absorb these costs, which have significantly increased from $20 billion in 2001 to over $170 billion today. This translates to an average annual cost of $1,100 per household. Retailers have limited ability to negotiate these fees, especially small businesses with thin profit margins. The National Retail Federation is advocating for legislation to encourage competition in the credit card processing market to mitigate these fees.
Stock Forecasts
V
Negative
As the discourse around credit card swipe fees gains traction in Washington, potential changes in legislation could impact major players like Visa and Mastercard. If the proposed Credit Card Competition Act passes, it could introduce competitive pressure and reduce fees, benefiting retailers and consumers alike. However, if the fees continue to be a burden, it may negatively affect consumer spending and retailer profits.
SQ
Positive
As an alternative, companies like **Square, Inc. (SQ)** may stand to gain from increased scrutiny of traditional credit card networks, if they promote their lower processing fees and integrate alternative payment solutions more effectively. This could appeal to retailers looking to cut costs.
Related News
Consumer watchdog warns companies against devaluing credit card rewards, launches tool to avoid scams
Dec 18, 2024, 12:59 PM
Credit card companies may be illegally devaluing rewards points or airline miles that customers have accrued, the Consumer Financial Protection Bureau warned.
Shoppers increasingly using cash to budget
Dec 4, 2024, 7:36 PM
Notes and coins used in a fifth of transactions, say retailers - a second consecutive annual rise.
This 'stepping stone' strategy helps parents boost their kids' credit score. Here's how it works
Dec 2, 2024, 12:17 PM
Adding a child as an authorized user to your credit card account can help jumpstart their credit history. But there can be risks, experts said.