MPC Advertising Campaign On High Swipe Fees

Last week, the Merchants Payments Coalition (MPC), of which EMA is a member, announced an advertising campaign to educate Congress and other policymakers on high “swipe” fees credit card networks and big banks charge merchants to process transactions and the impact the fees have on consumers, small businesses and the U.S. economy.

The campaign comes as Visa and Mastercard – which control nearly 80 percent of the U.S. credit card market – prepare to implement a $1.2 billion increase in swipe fees in April.

The increase was delayed from a year ago after members of Congress said it would “undermine efforts to help the economy recover.”

The six-figure campaign includes ads that will be featured in both social media and traditional media across Washington targeting members of the House and Senate and their staffs, and policymakers at agencies such as the Federal Reserve, Consumer Financial Protection Bureau, the Federal Trade Commission and the Department of Justice.

The ads, which will run through this spring, direct readers and listeners to the MPC website for more information.

As prices rise with inflation, swipe fees go up proportionately because the percentage is based on a larger amount, giving even more to the card industry.
            The fees have been a growing concern as consumers have shifted from cash to plastic during the pandemic, with the Fed saying cash accounted for only 23 percent of purchases in 2020, down from 32 percent just two years earlier in 2018, while credit and debit cards grew to 65 percent from 59 percent in the same period.

A recent Visa study found 53 percent of consumers expect to stop using cash within the next 10 years.

Several federal agencies have expressed concern over the fees in the past year. The Fed has proposed regulations clarifying that banks must enable all debit card transactions to be processed over at least one competing network such as NYCE, Star or Shazam in addition to Visa or Mastercard’s networks.

Both the DOJ and FTC are investigating practices that often block retailers’ right to choose which network processes online debit transactions.

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