WASHINGTON – Earlier this week, online publication The Daily Caller published an opinion piece by NACS Senior Vice President of Government Relations Lyle Beckwith, regarding increasingly high swipe fees paid by merchants. 

In the piece, Beckwith compared the U.S. market (unfavorably!) with the European Union, which recently voted to cap the swipe fees charged by banks to process debit and credit transactions. However, he also acknowledged that there is finally a consensus emerging, both domestically and internationally, that the current state of card industry price fixing is both unfair for competition and is bad economics.

“You should care because American retailers and restaurants pay seven or eight times more than European retailers to process the transaction when a customer swipes a debit or credit card. And that means higher prices for their customers,” wrote Beckwith, citing a tripling in swipe fees over the past decade, to more than $50 billion a year. They are now many merchants’ second-largest operating cost after labor.

But the news is not all bad, as Beckwith explains: The card companies used to bar merchants from giving customers discounts if they used cards with lower swipe fees, until the Justice Department sued, saying this was illegally anti-competitive, resulting in a recent ruling against American Express. The federal judge in the case stated: “[Charging] merchants inflated prices for their services … in turn, results in higher costs to all consumers who purchase goods and services from these merchants.”

Beckwith points out: “The ruling makes it clear that credit-card companies have been fleecing consumers and merchants for years.”

The editorial, “Can You Hear Me Now? Bank Swipe Fees Are Out Of Control,” is available in full on the Daily Caller website.