Inflation this, interest rates that. 📈 By now, news of the rising cost of living makes us all feel like a numb noodle. A cold ramen noodle, to be exact. 🍜
Want more poo poo platter news? Credit card companies are about to raise processing fees, which don’t just hurt retailers. Customers feel them in their pockets, too. 💰
Here’s Five Fast Facts on the impact of credit card processing fees:
- 💳 Part of the Process - Credit card processing fees, or swipe fees, aren’t new, but retailers and merchants worry about rising costs. Big companies like Visa and Mastercard charge fees to process credit card transactions. Retailers often pass some or all of those costs down to customers. The total amount of the fee is usually between 1% and 3% of a sale.
- 💸 Monopoly Money - Mastercard and Visa control roughly 80% of all credit card processing. In 2020, they didn’t increase fees, thanks to the pandemic. They also didn’t raise them in 2021, thanks to heat from Congress. However, in 2022 they went back to increasing costs. This coming January, they’re rumored to raise them again.
- 📈 Fees in the Breeze - How much do credit card processing fees cost the average household? In 2021, the average was $900. That’s since climbed to over $1,100 a year. Thanks to inflation, consumer prices hiked up roughly 20% since COVID. On top of that, as of 2023, credit card processing fees increased by about 50%: a whopping $172 billion.
- 🫴 Paying the Price - Why do credit card companies charge these fees in the first place? Costs cover everything from secure payment transactions to fighting fraud. They also keep cash back and rewards programs humming along. So they say.
- 🛒 Options Open - When it comes to dealing with these fees, retailers are stuck between a rock and a hard place. Visa and Mastercard dominate the credit card industry and not accepting them as a form of payment would hurt businesses. However, a Credit Card Competition Act was recently introduced to Congress. Under the act, at least one credit card company that isn’t Visa or Mastercard would need to be available to all merchants.
🔥Bottom line: Whenever we hear the word fees, our knees get weak and our palms get sweaty. It’s a noodle pun again, call that mom’s spaghetti. Still scared of a robot takeover? Tame the AI beast by learning its tricks. In this article, we cover all the ways people are making artificial intelligence work for them. Literally.
What was your biggest purchase in 2024?
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