Diesel prices across the country are reaching record highs, hitting truckers hard amid inflationary concerns. Kansas, ranked among the top five best states for truckers to live based on cost of living, and is feeling this impact first-hand. In May, diesel prices across the state climbed to an all-time high of $5.57 per gallon, and price surges are showing no signs of slowing down.
Due to a lack of options, and therefore competition, Kansas also has some of the most expensive electricity in the region, which is only increasing despite effort by legislators.
At a time when getting supplies to the stores and turning on the lights is significantly more expensive, businesses are struggling to make ends meet, particularly small businesses and retail stores that operate on tight margins.
Amid all of this, credit card companies are cashing in at the expense of consumers and other businesses. Visa and Mastercard recently raised fees that are charged to merchants every time you check out at a register or online with a credit card. Known as interchange or swipe fees, this cost is based on a percentage of the total price of your order and is paid for by the store you are doing business with.
These swipe fees often make up the second largest expense for retailers after labor. Because of this exorbitant cost to retailers, many businesses have to pass swipe fees off to consumers through higher prices in order to stay afloat.
Ultimately, consumers pay hundreds of dollars a year in swipe fee costs. Merchants are charged swipe fees on every transaction that is paid for with a credit card – which has become increasingly more common as e-commerce has exploded and cash use becomes less frequent.
For far too long, Visa and Mastercard, who set the swipe fees and control roughly 80% of the credit card issuer market, have raised these swipe fees indiscriminately. Given their duopoly control over this market, we can expect further increases regardless of the cost of processing transactions decreasing as a result of technological innovations.
Amid record inflation and skyrocketing prices for everyday goods like groceries and diapers, Americans are paying more than ever before in swipe fees. Every single Kansan, from our trucking community to our stay-at-home parents, is taking on the immense cost of raised swipe fees.
Thankfully, Sen. Roger Marshall (R-KS) recently introduced the Credit Card Competition Act, a bill that would require card issuers like banks and other lending institutions to provide at least one other routing option for credit card companies to use when processing transactions. This is a common sense, bipartisan piece of legislation that will rein in excessive swipe fees once for all and is a vital step forward in lowering overhead costs for retailers and, subsequently, prices for customers.
Businesses and consumers in Kansas and across the country should be optimistic about this leadership. Senator Marshall understands we are desperate for relief amid unprecedented financial strain. I am hopeful Congress will take on the powerful duopoly controlled by Visa and Mastercard and prioritize passing the Credit Card Competition Act before the end of the year.