Local business owner urges Congress to address credit card fees

Date: July 24, 2023


Erin Calvo-Bacci with Seth Moulton and others
Erin Calvo-Bacci with Seth Moulton and others

During a recent trip to Washington, Erin Calvo-Bacci, owner of the online retailer CB Stuffer told members of Congress that “swipe” fees banks charge merchants to process credit card transactions are driving up costs for small businesses and cost the average family over $1,000 a year.

“These fees are one of my highest costs and take a slice of the transaction every time a customer uses a credit card to pay,” Calvo-Bacci said. “That’s money I could use to hire more workers and continue to make contributions to our local community. These fees are so high because the big card networks have a monopoly over fees and processing. They should have to compete for business the same way small businesses like me compete every day.”

Erin Calvo-Bacci who owns the wholesale chocolate manufacturer Bacci Chocolate Design and online retailer CB Stuffer, was one of about 40 small business merchants from across the country who participated in a “fly-in” held by the National Retail Federation July 11-12. The storeowners held about 80 Capitol Hill meetings with members of the House and Senate and congressional staff to explain the impact of the fees.

Calvo-Bacci participated in about 5 of the meetings, including ones with Senator Ed Markey and Congressman Seth Moulton. She told lawmakers that her business is a mission-based business helping her employees gain life skills and they
work closely with the community offering various fundraising opportunities. “Having retailers like CB Stuffer come to Washington to tell lawmakers face-to-face how their businesses and their customers are impacted by these fees is essential to showing Congress the importance of passing this legislation,” NRF Chief Administrative Officer and General Counsel Stephanie Martz said. “Once members of Congress see how harmful and unfair these fees are, they know how badly relief is needed.”

Averaging 2.24% of the purchase amount, swipe fees have more than doubled over the past decade and rose 17% last year to a record $160.7 billion when debit cards are included. The fees are most merchants’ highest operating cost after labor – far too much to absorb – and drive up prices by an estimated $1,024 a year for the average family, according to the Merchants Payments Coalition. Cash is used for less than 20% of purchases today and card industry rules make cash discounts difficult, so swipe fees mean all consumers pay more.

The fly-in was held as Congress is considering the Credit Card Competition Act, which was reintroduced in June by Senators Richard Durbin, D-Ill.; Roger Marshall, R-Kan.; Peter Welch, D-Vt., and J.D. Vance, R-Ohio, and by Representatives Lance Gooden, R-Texas; Zoe Lofgren, D-Calif.; Thomas Tiffany, R-Wis., and Jefferson Van Drew, R-N.J. All of the bill sponsors spoke at the event except Vance, who met separately with Ohio merchants, and Durbin, who was at a NATO meeting in Europe and unable to attend.

Visa and Mastercard – which control 80% of the market – centrally price-fix swipe fees charged by banks that issue cards under their brands, and also block transactions from being processed over other networks that could do the job with lower fees and better security. The legislation would require banks with at least $100 billion in assets to enable cards they issue to be processed over at least two unaffiliated networks – Visa or Mastercard plus a competitor like NYCE, Star or Shazam. That would make networks compete over fees, security and service and is expected to save merchants and their customers $15 billion a year.

As the leading authority and voice for the retail industry, NRF regularly brings small merchants to Washington to meet with lawmakers and discuss issues that affect their businesses and communities.