Thatís because banks charge merchants an exorbitant ďswipeĒ fee that is hidden from consumers every time those consumers use a card to buy something. The fee can be as much as 4 percent. On a
These percentages may seem small, but they add up to big numbers: On
That means higher prices for consumers, too, even if they donít use a card to buy something.
Spending on Motherís Day will actually fall a little this year, says the
Although retail spending has risen overall this year, according to the federal
Merchants subsist in a highly competitive market, often on profit margins of a penny or two on the dollar. Itís unfair and counterproductive for banks to gouge them that much or more. (The powerful duopoly of MasterCard and Visa, which control this
Retailers from grocery stores to gas stations, on the other hand, compete against each other in a free, transparent, unfettered market; so do florists and restaurants and every other retailer. Their prices are out there for customers to see.
But what their customers donít see is that these merchants pay the highest swipe fees in the world, rising inexorably every year to the point where they are now many retailersí second-highest operating cost, second only to labor, higher than rent and utilities.
And the customers also canít see how this adds to prices and drags on economic growth.
This Motherís Day, the best present retailers could get would be competition, fair play and reasonable prices in the swipe-fee business.
For more information about unfair credit-card swipe fees, go to the
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