Understanding Rising Swipe Fees And Their Effect On Shoppers

Some say it's the cost of doing 'business', I call it annoying. If you've gone out in the last 5 years or made a purchase with a card, you are probably familiar with this private pet peeve of mine, the swipe fee that merchants are passing along to consumers. It seems a settlement has been 'potentially' reached over the fees that merchants are charged to run a card, but will that mean relief for consumers like you and me?

What Are Swipe Fees & What Do They Cost Consumers?

A swipe fee is the fee that the credit card company charges the merchant every time they run a card. The fees themselves, according to this online article, can fall anywhere between 2-2.5%, but sometimes they are more, depending on the contract. [My banking contacts tell me that some banks that run cards don't charge the 'interchange' fee, and instead charge the business a small percentage of total sales for usage of the credit card machine.]

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Lately, it seems those costs are now being passed on to consumers, sometimes with an added percentage point. According to the National Retail Federation:

"Swipe fees for Visa and Mastercard credit cards alone quadrupled from 2010 to $111.2 billion in 2024, and total credit and debit card fees reached a record $187.2 billion last year. The fees are most retailers’ highest operating cost after labor and drive up consumer prices by nearly $1,200 a year."

A Settlement On Fees & What It Means For The Consumers

According to Fox Business online, "Mastercard and Visa agreed to lower the fees that businesses pay when customers use their credit cards by about one-tenth of a percent on most U.S. credit card purchases for five years, according to regulatory filings."

That's right, .1%.

The settlement still has a ways to go, the courts still have to approve it, and that isn't expected to happen until 2026 or even 2027. Even then, a reduction of .1% isn't going to move the needle much for both businesses and consumers, so it seems the swipe-fees are here to stay, unless of course you pay with cash. (Just not pennies)

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