7/24/2023 0 Comments Galleria credit card swipes![]() ![]() With nine employees, she did about $2.4 million in revenue last year - and she says swipe fees are built into the cost of doing business. Melissa Clayton is the founder of Tiny Tags, a jewelry business she’s run for about 10 years. Retailers might be able to shop around between processors to find a deal. These processors work with the retailers to assess the fees and transmit the proceeds. Many retailers hire a third-party processor like Square, PayPal or Venmo for Business to handle the fee calculations and transactions associated with the card, Kantor said. How do retailers currently handle swipe fees? Swipe fees are not as high on networks in Canada, the United Kingdom and Europe, Kantor said. “That combination has been toxic for Main Street businesses across the country,” he said. The higher rates are compounded by increasing credit card usage, and people receiving more “expensive” credit cards that come with higher rates, Kantor said. But the rates have gone up in recent years, and costing retailers more. On average, a swipe fee costs 2.25% per transaction, Kantor said. When banks process the transaction, they charge the fee to the retailer. Set by Visa and MasterCard, the fees might be 1.25% plus $0.20 for a standard card, or 3.95 percent plus $0.25 for one that has better rewards. The fees go to the banks to cover processing costs as well as measures like security, fraud prevention and funding services to customers.ĭoug Kantor, general counsel with the National Association of Convenience Stores, a trade group that’s been pushing for change to the fees, said the fees are usually a fixed percentage applied to the overall cost plus a cash amount. The rate of the fee is different based on the kind of credit card the shopper has - a fancier rewards card will typically carry a higher fee. What are swipe fees and how do they impact retailers?Ī retailer pays a swipe fee, also known as an interchange fee, in order to process a credit card transaction. Here’s an overview of the swipe fee discussion and what’s at stake. They claim it will result in fewer credit card issuers, cost consumers, impact network security and overly benefit big-box retailers. More than 1,700 retailers, including many gas stations and grocers, signed onto a letter in September supporting the act, saying the credit card market “has been dominated by only two players for far too long.” Visa and MasterCard control at least 80% of the credit card market, according to the coalition, and set the swipe fees charged by the banks.īut multiple trade associations for banks and credit unions are opposing the act. retailers a collective $137.8 billion, according to the Merchants Payments Coalition, a lobbying group that supports the act. Last year, swipe fees went up 25% and cost U.S. ![]()
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