Provides Relief to Grocers and American Consumers
Arlington, VA—Today, FMI – The Food Industry Association endorsed the bipartisan Credit Card Competition Act sponsored by Sens. Dick Durban (D-IL) and Roger Marshall (R-KS) to guarantee merchant choice in payment routing by requiring at least two processors on credit cards. Regarding the legislation, FMI Chief Public Policy Officer and Senior Vice President, Government Relations Jennifer Hatcher issued the following statement:
“Americans are rightfully concerned about the impact of higher prices on their budgets for the items they need for their families. Despite this inflationary environment, credit card companies continue to dramatically increase the hidden processing fees that grocers and ultimately consumers are forced to pay for accepting/using credit cards for payments. These fees and increases contribute to higher prices for consumers, costing the typical American family an average of $900 per year, according to Nilson Report.
“We appreciate Sens. Durbin and Marshall for introducing this important bill as a critical first step in bringing greater competition to the credit card market and much needed financial relief to grocers and American families during these extremely challenging economic times.
“These fees charged by credit card companies in the U.S. are some of the highest in the world and account for many retailers’ largest operating cost after labor. In 2021, merchants’ card processing fees totaled $137.8 billion, per Nilson Report, up over 112% from the previous decade. As an industry historically operating on 1-2% profit margins, excessively high credit swipe fees reduce the ability of grocery stores to invest in their businesses and keep prices as low as possible for their customers.
“FMI strongly supports this legislation to bring competition and transparency to the credit card market by requiring more than one network option to route financial data on a credit card – just like most cities have more than one road leading into the city. Requiring more than one routing network would bring down the cost of swipe fees, increase transparency for retailers accepting credit card payments and encourage competition on innovative services and fraud protection."