Swipe fees add nearly $320 million to consumers' Halloween costs, merchants group says

WASHINGTON — Credit card processing fees will account for nearly $320 million of Americans’ Halloween spending this year, according to the Merchants Payments Coalition, which is urging Congress to pass legislation aimed at increasing competition among payment networks.

The coalition estimates that swipe fees represent $318.6 million of the $13.5 billion consumers are expected to spend on Halloween, based on spending projections from the National Retail Federation and an average credit card transaction fee of 2.36%.

That translates to about $2.72 of the projected average spending of $115.14, the coalition said. MPC acknowledged that the precise amount attributable to processing fees is difficult to calculate.

The estimate comes as merchants prepare for a major seasonal sales occasion and continue pressing lawmakers to address card processing costs. The coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants, hotels and other businesses.

“Congress has the chance to drive a stake through the heart of these out-of-control fees by passing the Credit Card Competition Act,” said Doug Kantor, an MPC executive committee member and general counsel of the National Association of Convenience Stores.

According to the coalition, credit card swipe fees average 2.36% of each transaction and can reach 4%. MPC said the fees are most merchants’ largest operating expense after labor and are incorporated into merchandise prices, affecting shoppers regardless of how they pay.

Using NRF’s category projections, the coalition estimates that fees will account for $103.8 million of costume spending, $101.5 million of decoration purchases, $96.8 million of candy sales and $18.9 million of greeting card purchases.

The Halloween estimate highlights what merchants describe as a broader escalation in payment costs. Visa and Mastercard credit card swipe fees have more than quadrupled since 2010, reaching $118.8 billion last year, according to MPC. Total credit and debit card swipe fees reached a record $198.25 billion, the group said.

The coalition argues that the fee structure limits competition because Visa and Mastercard each centrally establish rates charged by banks issuing cards under their brands and restrict processing to their respective networks.

Under the Credit Card Competition Act, banks with at least $100 billion in assets would be required to enable credit card transactions to be processed over at least one unaffiliated network, such as Star, NYCE or Shazam, in addition to Visa or Mastercard.

MPC contends that additional processing options would encourage competition on fees, security and service. The coalition projects that the legislation would save merchants and their customers $17 billion annually.