A bunch of retailers are behind this bill, including giants like Walmart and Target. And the idea is maybe having this forced second choice would, over time, force everyone to compete on price, maybe lower those fees. So not just Visa or MasterCard, but maybe also Discover or a smaller company - like, there's one called SHAZAM. For each credit card, banks would be required to give stores a choice of two payment networks. SELYUKH: So the goal is to force more competition. RASCOE: Well, what exactly would this bill do? And now there is a bipartisan bill in the Senate that takes a crack at that. The group has been lobbying lawmakers to curb the swipe fees for years. The National Retail Federation argues that Visa and MasterCard are basically a duopoly. Many retailers eventually have to pass on that cost to shoppers, so they might raise prices. SELYUKH: You know, thousands of dollars in swipe fees. People talk about it in terms of it's an employee that you can't hire. PATTI RIORDAN: Right now, it's the third largest cost that we have - payroll, rent and swipe fees. Maybe it doesn't sound so huge, but if you're a small grocer, maybe, your entire profit margin might be 5%, you know? I talked to Patti Riordan who runs the Smoke Stack Hobby Shop in Lancaster, Ohio, and she says her store pays almost the same amount in swipe fees each month as she does to rent her entire store. On average, every transaction means a fee of just under 2%. So, Alina, these retailers that you talk to, why do they hate these fees so much? Store owners just hate it because they end up paying so much money. The stores pay it to credit card companies, which is almost always Visa or MasterCard.ĪRNOLD: And actually, if you have a friend who runs a small business, just, like, try bringing up this whole swipe fee thing and see what happens 'cause, I mean, you'll get an earful. It's the swipe fee, which is also called an interchange fee. In all the years I've been talking to retailers, this is, like, their No. SELYUKH: But the retailers definitely see it. So every time you pull out your card and you swipe it, your money travels through this, like, underground - well, it's not really underground, but it's, like, this financial plumbing system, and the store has to pay a fee that you don't actually see. RASCOE: So what is this big battle, and what is it over?ĪRNOLD: All right, so what's happening is that there could be a big change coming to the way that credit cards basically work. To explain, we'll turn now to NPR's Alina Selyukh, who covers retail, and NPR's Chris Arnold, who follows personal finance. It's between the place you're shopping and the credit card companies - mostly Visa and MasterCard. The next time you pull out your credit card to buy something, you should know, you're at the epicenter of a big battle.
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