U.S. Merchants Say Canadian Deal Shows Credit Card Swipe Fees Could Be Lowered Here
Deal is expected to save Canadian merchants $1 billion over five years
(PRESS RELEASE) WASHINGTON – The Merchants Payments Coalition today said an agreement in Canada to lower credit card “swipe” fees shows that the fees could be reduced in the United States as well.
“If Visa and Mastercard can afford to reduce their swipe fees in Canada, there’s no reason they can’t do the same here,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “U.S. merchants and their customers pay twice as much as Canadians and seven times as much as Europeans. It doesn’t make sense that the country that invented the credit card and is home to the two largest card networks on the planet has the highest swipe fees in the industrialized world. It’s time for Congress to act and at least bring competition to U.S. swipe fees.”
The Canadian Department of Finance on Thursday announced a deal with Visa and Mastercard that will lower the average fee to process most in-store credit card transactions to an average 0.95 percent from the current 1.4 percent average. The move is expected to save Canadian merchants $1 billion over five years and “make credit card transactions fairer for small businesses,” the government said in a news release. Canada is the latest government to address swipe fees, which the European Union capped at 0.3 percent for credit cards and 0.2 percent for debit cards in 2015.
By comparison, swipe fees for Visa and Mastercard credit cards average 2.24 percent in the United States and can be as high as 4 percent. U.S. credit and debit card swipe fees have more than doubled over the past decade and soared 17 percent last year alone to a record $160.7 billion. They are most merchants’ highest operating cost after labor and drive up consumer prices by more than $1,000 a year for the average U.S. family.
The Canadian agreement comes as Senators Richard Durbin, D-Ill., and Roger Marshall, R-Kan., are working to pass the Credit Card Competition Act. First introduced last year, the legislation would require that U.S. banks with over $100 billion in assets enable credit cards to be processed over at least two unaffiliated networks. One could still be Visa or Mastercard but the other would be a competing network such as NYCE, Star or Shazam. Banks would choose which two to enable but merchants would choose which to use, forcing networks to compete over fees, security and service. Payments consulting firm CMSPI estimates that competition would save businesses and their customers at least $11 billion a year.
Visa and Mastercard – which control 80 percent of the market – currently price fix the swipe fees charged by U.S. banks that issue cards under their brands rather than the banks competing to offer merchants the best deal. They also block competition by restricting processing to their own networks even though most competing networks charge lower fees and, according to the Federal Reserve, have less fraud.Advertisement
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants.
Send your press releases to VMSD at firstname.lastname@example.org. Learn about our submission guidelines.
Embracing Whole-Brained Thinking in the Design Journey
Strategy needs creative, and creative needs strategy—yep, having both is really the only way of unifying all disciplines with a common vernacular with an eye toward building a strong creative vision that is foundational to the processes. Hear from Bevan Bloemendaal, former VP, Global Environments & Creative Services at Timberland, how to connect the dots between disciplines, claiming and creating a clear differentiation for the brand and ensuring that any asset (experience, product, ad, store, office, home, video, game) is created with intention.
Store Design Is Linear, Not Stop-Start: Ask Marks & Spencer
Shapellx Open First Physical Store
Petco Unveils New Flagship in New York
Lululemon’s Global Creative Director Has Died
New Leases on Life for Ex-Canadian Bed Bath & Beyond Stores
Slain H&M Worker Credited with Saving Lives in Texas Mall Mass Shooting
Design Profile2 weeks ago
Thierry Lasry Delivers the Unexpected with New Store Design
Headlines1 week ago
Threats Prompt Target to Pull Some LGBT-Related Merch
John Ryan5 days ago
Zara Becomes Gallery-Like in Paris
Photo Gallery1 week ago
20 Winners from the 2023 Shop! Outstanding Merchandising Achievement Awards
Sector Spotlight2 weeks ago
Convenience Stores Up Their Game to Stay Competitive
Headlines5 days ago
Top 20 U.S. Metros Poised for Retail Growth
Headlines2 weeks ago
Adidas to Release Yeezy Merchandise
Headlines2 weeks ago
Primark Adding Three U.S. Stores this Summer