The National Grocers Association called on lawmakers to fix the “broken” U.S. card payments system and stem the rising tide of swipe fees that compound the impact of inflation and cost merchants and consumers billions of dollars annually.
NGA submitted a statement for the record to the U.S. Senate Committee on the Judiciary in advance of the committee’s hearing on May 4, “Excessive Swipe Fees and Barriers to Competition in the Credit and Debit Card Systems,” convened by Chairman Dick Durbin and Ranking Member Chuck Grassley.
“For more than a decade, Visa and Mastercard have set not only their network fees – the costs associated with a credit or debit card payment being routed through their network, but the interchange fees that merchants pay to the issuers of the credit and debit cards that Americans transact with. Nearly twice a year, every year, these two card networks have instituted fee changes which, on net, almost always lead to increases in merchants’ costs,” NGA declared in the statement. “This hearing comes on the heels of a net $1.2 billion increase in interchange fees implemented by Visa and Mastercard in April 2022.”
“U.S. merchants pay the highest swipe fees in the industrialized world, but they have no ability to affect these costs,” said Greg Ferrara, NGA president and CEO. “These anticompetitive fees imposed on independent grocers drive up the costs of food and other goods at a time when Americans are already reeling from a level of inflation not seen in a generation.”
Robert Yeakel, VP of government relations for NGA, also commented on the release, saying that “the two global networks centrally set the pricing and structure of swipe fees. In any other market, be it grocery or elsewhere, if prices were centrally set by two companies for the rest of the industry’s participants, there would be significant antitrust concerns. In the credit card space, however, this has been industry practice for more than a decade.”
The full text of the statement is available here.
NGA is the national trade association representing the retail and wholesale community grocers that comprise the independent sector of the food distribution industry. An independent retailer is a privately owned or controlled food retail company operating a variety of formats.
The independent grocery sector is accountable for about 1.2 percent of the nation’s overall economy and is responsible for generating more than $250 billion in sales, 1.1 million jobs, $39 billion in wages and $36 billion in taxes. NGA members include retail and wholesale grocers located in every congressional district across the country, as well as state grocers’ associations, manufacturers and service suppliers.
For more information about NGA, visit nationalgrocers.org.