The total is nearly a third more than previously believed.

September 11, 2024

According to new data released by payments consulting firm CMSPI, credit and debit card swipe fees totaled $224 billion last year, which is nearly a third more than previously believed, as reported by the Merchants Payments Coalition.

The Nilson Report, a trade publication that follows the card industry and is one of the most widely quoted sources of data on swipe fees, reported swipe fee totals of only $172 billion this spring. In addition, CMSPI said Visa and Mastercard credit card swipe fees averaged 2.94% of the transaction amount last year, compared with 2.26% reported by Nilson.

CMSPI said its figures include interchange fees, which go to card-issuing banks; network fees, which go to card networks like Visa or Mastercard; and processing fees, which go either to a merchant’s “acquirer” bank or a third-party processor. Interchange, the largest of the fees, accounts for $143 billion of CMSPI’s 2023 total.

“This report shows that the cost of swipe fees is much higher than previously known and that the impact on small businesses and consumers is far more severe,” MPC Executive Committee member and FMI—The Food Industry Association Chief Public Policy Officer Jennifer Hatcher said. “This underscores the need for Congress to bring competition to the broken payments market as soon as possible. These fees are rising more rapidly than anyone knew before and have to be brought under control. They dramatically drive up prices for almost everything anyone buys, and American families cannot afford for these fees to go any higher.”

CMSPI’s report was prepared in collaboration with its Insights Advisory Council, a panel made up of representatives of major merchants formed in 2023.

Typically ranging from 2% to 4%, swipe fees are one of most merchants’ highest operating cost after labor, and these fees have to be built into pricing. The total amount of fees collected has more than doubled over the past decade, and the fees drive up product prices by about $1,700 a year for the average family based on the CMSPI numbers. That compares with over $1,100 based on Nilson’s numbers.

The new data comes as Congress is considering the Credit Card Competition Act, which is aimed at reducing swipe fees. In February, U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee and Senator Roger Marshall (R-KS) announced two new co-sponsors to the Credit Card Competition Act: Senators Josh Hawley (R-MO) and Jack Reed (D-RI).

“This shows that support is growing across the country and across the political spectrum for action that would bring competition to credit card swipe fees,” MPC Executive Committee member and National Grocers Association Chief Government Relations Officer and Counsel Chris Jones said. “We thank Senators Hawley and Reed for supporting Main Street businesses and their customers and look forward to working with them to bring fairness to the credit card market.”

NACS members are encouraged to reach out to their members of Congress and ask that they support the Credit Card Competition Act. NACS makes it easy for retailers and suppliers to send a message to their legislators via the NACS Grassroots Portal.