Swipe left… Your local grocery and Disney have a common enemy: card fees. This spring, Visa and Mastercard hiked the “swipe fees” they charge merchants for card purchases. FYI: merchants can pass swipe costs on to shoppers. Visa and Mastercard process 83% of US credit cards and earned $55B+ from swipe fees last year. But the duopoly is under scrutiny:
Land of the fee… home of the paid. US retailers pay 7X more in swipe fees than European retailers, which cap card fees. Most of that fee $$ goes to the bank that actually issued your card, because the bank is the one paying the merchant. But networks like Visa and Mastercard, which move your $5 latte payment from your bank to your coffee shop, are cashing in too:
The swipe economy is changing… Swipe fees increase costs for US families by $700 annually, on average, and hit low-income shoppers hardest. Now lawsuits and legislation could rewrite payment rules and curb the swipe-opoly. Meanwhile, Visa and Mastercard are building in-house buy now, pay later systems and crypto products to unlock revenue beyond swipes. But they’ll face scrutiny: last year the DOJ blocked Visa’s $5.3B acquisition of pay-tech giant Plaid.