Payments

Retailers join forces to reduce credit card fees

Photo by istock.com

September 16, 2022

Walmart and Target are just two of 1,600 retailers joining forces to pass legislation that would give them the right to route credit-card payments over networks not tied to Mastercard and Visa.

The retailers are lobbying lawmakers to pass a bill it believes would reduce fees related to credit card purchases — fees that are typically passed onto consumers via higher prices on products.

The bill was introduced in July by Democrat Sen. Richard Durbin, of Illinois and Sen. Roger Marshall, a Republican from Kansas, according to a Wall Street Journal report.

"Swipe fees for credit cards are higher in the United States than anywhere else in the industrialized world — more than seven times as high as Europe," the retailers group stated in a letter to lawmakers. "In 2021 alone, U.S. merchants and consumers paid nearly $138 billion in card fees."

Visa and Mastercard process approximately 77% of general credit card spending, according to data from The Nilson Report.