NGA Lauds Congress as Higher Swipe Fees Loom

Following reports that Visa Inc. and Mastercard Inc., the two big payments networks, are planning to raise their fees this month, the National Grocers Association, which represents independent retail and wholesale community grocers, praised members of Congress who penned an April 15 letter to the CEOs of Visa and Mastercard urging the companies not to proceed with plans to raise their interchange fee rates.

“We urge you to withdraw your plan to raise credit and debit card fees on American business owners and hard-working American families. As Americans are dealing with the highest rate of inflation in decades, your profits are already high enough and any further fee increase is simply taking advantage of vulnerable Americans,” the letter said in part.

NGA President and CEO Greg Ferrara wrote a letter April 20 to U.S. Senate Majority Whip Dick Durbin (D-Ill.), U.S. Sen. Roger Marshall (R-Kan.), and U.S. Reps. Peter Welch (D-Vt.) and Beth Van Duyne (R-Texas) thanking them for their bipartisan, bicameral efforts urging Visa and Mastercard to do without their planned swipe fee rate increases. 

In the letter to the members of Congress, Ferrara said “independent grocers do all they can to keep costs low and maximize savings that can be passed on to their customers. Unfortunately for grocers, and merchants in general, there has been one cost over the years that cannot be contained and continues to increase on an annual basis: the fees associated with accepting credit cards, also known as ‘swipe fees.’ ”

NGA said independent grocers paid more than $100 billion in swipe fees to accept credit cards in 2021, according to the Nilson Report. The national trade association said Visa and Mastercard’s anti-competitive duopoly has allowed these networks to increase swipe fees on an annual basis for decades without any ability for grocers to affect those costs.  

“Independent grocers do all they can to absorb swipe fees, the competitive nature of the grocery industry demands this, but absorbing these out-of-control increases is simply not sustainable for any businesses, especially small businesses. This means that some amount gets 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 per year in swipe fees,” Ferrara wrote.   

The National Retail Federation (NRF), a retail trade association based in Washington, D.C., also voiced its opposition to the swipe fee increases scheduled to take effect this month.

“American consumers are struggling under the worst inflation in four decades and these increases would only make the situation worse,” NRF VP for Government Relations, Banking and Financial Services Leon Buck said in a statement. “Swipe fees are a percentage of the transaction, so banks and card networks are already receiving an unearned windfall as they piggyback on higher prices. They’re going to see billions of dollars more in revenue this year even if rates stay the same, so an increase would only add insult to injury.”

As Americans continue to cut back on nonessentials at the grocery store and inflation continues to run at 40-year highs, Ferrara said this is the last thing shoppers need to add to their already high grocery bills.

“Food inflation is at a 40-year high, and one of the most frequent places that Americans notice these price increases is at the grocery store. At a time when both the supply chain and local communities are faced with increased costs, the last thing grocers or their customers need is swipe fee hikes,” he said.