Letter: Deliver competitors to bank card swipe charges

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With the acceleration in on-line procuring and widespread use of contactless playing cards and cell funds in shops through the coronavirus pandemic, nearly each retail buy made at the moment is paid for with a bank card or debit card.

That’s a change that could be right here to remain, but it surely’s unhealthy information for retailers and shoppers alike, particularly these nonetheless struggling to get well from the financial impression of COVID-19.

The reason being that bank card networks and the massive banks cost retailers a “swipe” payment averaging about 2 p.c of the acquisition quantity each time a bank card is used, whether or not it’s swiped, inserted or used by way of a digital pockets. These charges add up rapidly, totaling nearly $100 billion a yr. They’re amongst most retailers’ highest price and drive up costs by a whole lot of {dollars} a yr for the common household.

U.S. swipe charges are the very best within the industrialized world, seven occasions the quantity allowed in Europe. They’ve gotten there due to lack of competitors – bank card swipe charges for Visa and Mastercard are set centrally by the 2 big card networks, and nearly each financial institution that points their playing cards prices the identical charges fairly than competing to supply decrease charges. Authorized specialists say that’s a violation of antitrust regulation. Moreover, transactions on Visa bank cards can solely be processed over the Visa community and the identical goes for Mastercard and its community. In contrast, debit playing cards might be processed over a dozen competing networks, which supply higher safety and decrease charges than Visa and Mastercard.

Not surprisingly, banks and the cardboard networks wish to shield the established order. They wish to proceed making monumental earnings on the backs of small companies and working-class shoppers. They love the windfall they’ve seen through the pandemic and are already planning an enormous enhance in charges subsequent yr.

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It’s time to deliver competitors to bank card swipe charges.

Arch Simonson, Simonson Station Shops of North Dakota, Grand Forks

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