The Banks Are Giving Thanks for Outrageous Fees That Raise Prices for Consumers

WASHINGTON--()--The following press release was issued by Merchants Payments Coalition:

This Thanksgiving the banks once again will be serving up a heaping plateful of exorbitant fees to merchants and a side of high prices to consumers.

In fact, the banks make everything more expensive every day – from groceries to airline tickets – through a fee they charge retailers when a customer swipes a debit or credit card.

The banks gouge merchants as much as 4 percent on these “swipe fees.” Consider the result: The cost of feeding 10 people for Thanksgiving has hovered around $50 the last few years, according to the American Farm Bureau Federation. That means if you use a credit card to buy those groceries, the bank may take as much as $2 off the top.

Since it costs only a few cents to process this transaction, the bank reaps a profit of 10,000 percent.

Or consider this: Airlines for America says 25 million Americans will be flying this Thanksgiving. At 4 percent, banks will grab almost $15 on the average $370 ticket to top destinations like New York City and Orlando. They will also collect a swipe fee on each hotel room and restaurant dinner charged to a card.

Visa and MasterCard price-fix swipe fees so their member banks can charge merchants the highest swipe fees of any industrialized country on earth. These fees are now the second-highest operating expense for many retailers, who – unlike banks – operate on skimpy profit margins and are forced to raise prices to survive. Consumers pay more whether they use a card or not, which is not only unfair but especially hurts poor people.

Modest reform of debit cards alone saved consumers $6 billion in the first year. The U.S. must finish introducing competition into the debit market and then move on to credit cards.

Merchants and consumers will be thankful.

The Merchants Payments Coalition represents retailers, restaurants, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses fighting against unfair credit card fees and for a more competitive and transparent system fair for consumers and merchants alike. The coalition’s member associations represent 2.7 million stores with 50 million employees.

Contacts

Merchants Payments Coalition
Michael Flagg, 202-253-4164
mflagg@castinegroup.com

Contacts

Merchants Payments Coalition
Michael Flagg, 202-253-4164
mflagg@castinegroup.com