Credit card swipe fees could add $3.4 billion to back-to-school shopping costs, coalition says

WASHINGTON, D.C. — Credit card processing fees are expected to add a record $3.4 billion to back-to-school and back-to-college shopping costs this year, increasing expenses for families as they purchase school supplies, clothing and electronics, according to the Merchants Payments Coalition.

The coalition estimates that so-called “swipe” fees charged to merchants by banks and credit card companies will cost the average family about $20 for K-12 purchases and $34 for college-related purchases. Those costs are typically built into retail prices, the coalition said.

“With swipe fees rising year after year, this hidden tax undermines affordability and drains money from families that need it,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “A family could buy superhero lunchboxes for two kids or a backpack for their college sophomore with the money credit card companies are swiping from them. Congress should protect families trying to deal with the high cost of putting their children through school by passing the Credit Card Competition Act.”

According to the National Retail Federation, families are expected to spend an average of $864 on K-12 school supplies, clothing and related items this year, totaling $43.3 billion nationwide. The coalition estimates swipe fees account for approximately $20 of that spending per family, or $1.02 billion overall.

Back-to-college spending is projected to average $1,438 per student, totaling $103.5 billion. The coalition estimates swipe fees will account for an average of $34 per family, or $2.4 billion nationwide.

Combined, swipe fees associated with back-to-school and back-to-college shopping are expected to total $3.4 billion.

The coalition estimates swipe fees account for about $3.46 on average K-12 school supply purchases, $6.92 on electronics and $10.01 on clothing and shoes. For college students, the fees average $4.58 for dorm furnishings, $4.30 for clothing and $8.07 for electronics.

According to the coalition, Visa and Mastercard credit card swipe fees alone exceeded $118.8 billion last year, while total credit and debit card processing fees reached a record $198.25 billion. The group contends the fees continue to rise because Visa and Mastercard control about 80% of the credit card market.

The coalition is urging Congress to pass the Credit Card Competition Act, which would require banks with at least $100 billion in assets to enable credit cards to be processed over at least one unaffiliated payment network in addition to Visa or Mastercard. Supporters of the measure say increased competition would reduce processing fees, improve security and save merchants and consumers an estimated $17 billion annually.