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Electronic Payments Coalition Dispels Credit Card Interchange Misinformation

| Electronic Payments Coalition

Interchange has flatlined over the last 7 years while merchant prices, credit card usage has increased

WASHINGTON, DC — Mega retailers like Walmart and Target are using their allies on Congress to continue spreading misinformation about credit card interchange. 

The truth: interchange rates have not risen in seven years, but merchants have continued to hike their prices over the years even though interchange has flatlined, taking more money from consumer pockets. 

A National Association of Convenience Stores (NACS) statistic shows, “gas stations profited $65 billion over the last year, while interchange rates remained flat.” Meanwhile, the 2023 Nilson Report found that “card-based spending made up 75.6% of consumer payment transactions in 2021 [and the percent] is expected to grow to 80.4% in the next five years.” 

Below is a statement from EPC Executive Chairman Richard Hunt: 

“Credit cards offer consumers a convenient, secure payment option and offer merchants instant payment processing. To continually improve access and protect consumer data, the leading credit card networks charge a small percentage, which is relative to the payments merchants collect. The revenue generated is reinvested to improve payment rails and interchange rates have largely flatlined over the last seven years, the revenue collected by merchants through credit card purchases on the other hand has increased dramatically. 

“The legislation proposed by Senators Durbin and Marshall would do little more than create a windfall for the nation’s largest retailers like Walmart and Target while undermining consumer protections and access to credit as well as jeopardizing the rewards programs millions of American families use to reduce the cost of goods like groceries and gas.

“In fact, all we have to do is look at history to see what will happen if this bill passes. Congress passed similar legislation related to debit cards in 2010, citing the same promises of lower consumer prices. But, instead, The Richmond Fed confirmed just one percent of merchants lowered prices while nearly a quarter raised them – and pocketed any so-called savings.” 

– Richard Hunt, EPC Executive Chairman

With current credit card swipe fee legislation under consideration, card users could lose their rewards and cash-back incentives, while merchants continue to raise prices and profit from credit card sales revenue. It’s imperative that big-box retailers and legislators stop misleading the public and start telling the truth. 

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