WASHINGTON (NEXSTAR) — Sen. Dick Durbin (D-Ill.) worries hidden fees are adding fuel to the fire of inflation.
“Retailers were at the mercy of the credit cards and banks,” Durbin said.
Visa and Mastercard charge businesses a fee for every transaction, and some of those so-called “swipe fees” are going up.
“Some would characterize this as a duopoly, able to extract above-market payments for their services,” Sen. Chuck Grassley (R-Iowa) said.
Both companies say the fees are fair.
“Any notion that we are not operating in a highly competitive market, we fundamentally disagree with,” Visa CEO Bill Sheedy said.
“We are incentivized to create balance across all stakeholders, both merchants and banks,” Mastercard President Linda Kirkpatrick said.
But some experts and businesses say credit card companies are too powerful.
“These fees can get set well beyond any semblance of value.” National Association of Convenience Stores General Counsel Doug Kantor said.
“Visa and Mastercard effectively control over 80% of the credit market and they are the only vendor in which we cannot negotiate with,” Giant Eagle Inc. CEO Laura Karet said.
Last year, merchants paid out more than $77 billion in credit card fees and more than $28 billion in debit card fees. Experts say these fees ultimately push up prices.
“They can’t do anything else but to back the fees into all of the costs that all consumers pay, including low-income Americans,” Federal Consumer Program Senior Director Ed Mierzwinski said.