Monarch owner: Credit card ‘swipe fees’ are swiping too much from businesses, consumers | Opinion

From groceries to gas, Kansas consumers are weary of the inflation that has gripped the nation for the last several years.

And if the price tag of everyday items isn’t frustrating enough, patrons of restaurants and retail stores are also experiencing the costs of exorbitant swipe fees on credit card transactions.

Over the past decade, credit and debit card swipe fees have more than doubled and jumped nearly 17% last year alone, to a record $160.7 billion nationwide.

For the average family, these incremental charges add up to an extra $1,000 per year.

This unfortunate reality is the product of the stranglehold that the two largest card networks, Visa and Mastercard, hold over the payments ecosystem.

Because they have a duopoly on the last highway of electronic payments, they can charge whatever they want.

The pain of this anti-competitive market is real.

Because only about 9% of my sales are paid in cash, swipe fees are among my highest costs behind food and labor.

At an average of 2.8% per transaction, the costs add up quickly.

In the first six months of 2019, I paid $24,782 in credit card fees. During the same time period this year, my credit card processing fees have jumped to $39,433.

These costs have become overwhelming to me and all small businesses that accept credit cards.

Without relief from this ever-rising cost of doing business, I and other small business owners will have no choice but to raise prices to help cover the cost.

It’s anti-competitive, unfair, and unnecessary.

Thankfully, Congress has heard from small businesses like mine across the country and is acting.

The Credit Card Competition Act of 2023 is seeing broad support and is co-sponsored by Kansas Sen. Roger Marshall.

This bipartisan legislation would enhance competition and choice in the credit card network market that is dominated by the Visa-Mastercard giants.

Building off debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that giant credit card-issuing banks with more than $100 billion in assets offer a choice of at least two networks over which an electronic credit transaction may be processed.

If passed, the bill would truly open the credit card transaction market to competition, which will ultimately translate to lower costs at the swipe terminal.

This can’t come a moment too soon, as restaurants like mine are still struggling due to the skyrocketing costs of food, equipment, rent, utilities and more — as much as a 30% increase for our industry.

While I was fortunate to weather the COVID-19 pandemic, many other Kansas restaurants are still digging out from a financial crater from mandated closures.

Restaurateurs are resilient entrepreneurs.

We aren’t looking for handouts, but any relief would be welcome, and the Credit Card Competition Act is a big step in the right direction.

It will inject healthy competition in the market, so we have a choice of processing company.

With more options, swipe fees will inevitably decrease, and we could pass the savings on to our customers.

On behalf of the Kansas restaurant industry, I want to thank Sen. Marshall for stepping up and doing the right thing for small businesses in his state.

His priority of picking Main Street over Wall Street is admirable and he should be commended.

Jennifer Ray is the owner of The Monarch restaurant and bar in Wichita