Rising credit card swipe fees hurting consumers, businesses | Nick Albrecht

U.S. Sen. J.D. Vance has made a smart and level-headed move by co-sponsoring the Credit Card Competition Act.

Vance recognizes that his Ohio constituents and all Americans are consumers who need help to protect them against rising credit card “swipe” fees that drive up the price of almost everything they buy. And he knows the bill is a bipartisan opportunity to lower prices for all American families.

My brothers, sister and I — along with over 1,500 great associates — operate a fifth-generation, 130-year-old, regional grocery chain called Acme Fresh Markets based in Akron. Believe me when I say I lay awake at night (as many business owners do) thinking about how to lower operating and product costs so we can deliver value to the families who shop in our stores. But the one huge cost we can’t even begin to manage is runaway credit card swipe fees.Credit and debit card swipe fees have more than doubled over the past decade and increased by nearly 17% in 2022 alone to a record $160 billion. They are most merchants’ highest operating cost after labor and drive up prices for the average American family by more than $1,000, according to the Merchants Payments Coalition.Right now, there is no competition over these fees and credit card companies continue to raise them every year, increasing prices that American families pay every time they use their cards. Visa and Mastercard — which control over 80% of the market — centrally price-fix the swipe fees charged by all banks that issue credit cards under their brands and also restrict processing to their own networks.The Credit Card Competition Act would lower costs by requiring that the nation’s largest banks enable a second processing network such as NYCE, Star or Shazam on the credit cards they issue. These are the same high-security networks that have safely and efficiently processed debit card and ATM transactions for decades and have both lower fees and better security. Doing so would create competition over fees, service and security that would save merchants — and consumers — $15 billion a year. That’s real competition — and competition is the American way.Card companies and banks claim that rewards and “perks” point systems associated with credit cards would go away if this bill were passed. That argument deserves no credit. In fact, if lower swipe fees would mean fewer rewards, why haven’t my credit card perks gotten better in the past year as swipe fees have gone up? Mine haven’t. Have yours?

Points and rewards seem harder to redeem because of additional out-of-pocket cash fees, blackout dates and expiration dates. If credit card companies have to compete, reward programs will actually get better. That’s what competition does. Rewards are banks’ biggest marketing tool for getting consumers to choose a Visa or Mastercard from one bank versus the other and are determined by the bank that issues the card, not the network that processes the transaction. Rewards aren’t going anywhere.Insulating credit card companies from competition for the sake of rewards that only a minority of Americans can actually use is an out-of-touch argument. American families are struggling with inflation, bills and a potential recession. Congress has the wonderful opportunity to help them keep their money in the bank instead of needlessly handing it over to the card companies. In fact, America’s banking system would grow stronger by passing this bill. With fewer hidden processing fees to pay, families would have more money to deposit at the bank.Sen. Vance recognizes that all Americans are citizen-consumers. Now other senators and representatives have a chance to do the same. What better way is there to serve and support the people of the United States of America — the citizen-consumer — than by voting for the Credit Card Competition Act?Nick Albrecht is a fifth-generation grocer and president of the Fred W. Albrecht Grocery Co., parent of family-owned, 16-store Acme Fresh Market. He is a former U.S. Army field artillery officer.

This article originally appeared on Akron Beacon Journal: Akron business supports Credit Card Competition Act