FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 craig@shearmancommunications.com
WASHINGTON, May 13, 2026 — The Merchants Payments Coalition and member trade associations today urged the Senate Banking Committee to reject a proposal that would allow dozens of large banks to increase the fees they charge merchants to process debit card transactions, saying the move would mean higher prices for consumers.
“At a time when small businesses are struggling to stay afloat and when consumers are facing serious affordability challenges, the last thing our nation needs is higher debit card transaction fees that are borne by merchants and consumers,” MPC and the other groups said in a letter to the committee. “But that is exactly what a vote for this amendment would bring about.”
Under Federal Reserve regulations established in 2011, banks that have at least $10 billion in assets and follow rates centrally set by Visa and Mastercard can charge merchants swipe fees of no more than 21 cents per debit card transaction plus 1 cent for fraud prevention and 0.05% of the transaction amount for fraud loss recovery. Banks are free to charge more if they set their own rates, but none do so.
Under legislation sponsored by Senators Ted Cruz, R-Texas, and Katie Britt, R-Ala., the threshold would initially be increased to approximately $15 billion in assets and tied to increases in the Consumer Price Index going forward. Doing so would exempt two dozen of the 130 banks currently covered, allowing them to immediately increase debit card swipe fees, and would exempt more banks in the future.
Covered banks already make a “lucrative profit margin” of 500% on the fees compared with their average cost, and exempt banks make even more, the letter said. Increasing the number of exempt banks “would come directly at the expense of merchants and consumers.”
Britt, a member of the Banking Committee, has introduced an amendment that would make the bill part of the CLARITY Act, a cryptocurrency marketplace structure bill scheduled to be considered on Thursday.
Today’s letter, signed by 17 merchant groups, said “there is no justifiable need to change the asset threshold … and there are several compelling reasons not to do it.”
The letter said change isn’t needed because the regulated rate applies only to banks that allow card networks to set swipe fee rates on their behalf while those that set their own rates can charge as much as they like. In addition, banks covered by the regulations can already charge “quite generous” fees because the typical 23-24 cents per transaction is over five times banks’ average cost of 4.1 cents, or a 500% profit.
Exempt banks charge an average 62 cents per transaction, or roughly three times the regulated rate. Increasing the number of exempt banks “would increase inflation at the checkout counter and at the gas pump” because “those banks could immediately deduct dramatically more interchange fees which merchants and ultimately consumers would have to pay — even though those banks’ costs have not increased. This would produce an enormous windfall for several dozen banks while burdening merchants and consumers with higher costs and prices.”
Consideration of the Cruz-Britt amendment comes as merchants are still waiting for the Fed to move forward on its 2023 proposal to reduce the regulated rate to 14.4 cents per transaction and the amount for fraud loss to 0.04% while increasing the amount for fraud prevention to 1.3 cents.
The proposed reduction was the first since the rate was set despite a federal law that required the Fed to review the rate every two years and keep it “proportional” to banks’ costs. MPC said the proposal didn’t go far enough because it would lower the amount by less than a third even though banks’ average cost had fallen by nearly 50%.
Since 2023, a federal judge ruled in a case brought by Corner Post, a North Dakota truck stop, that the Fed set the rate too high in 2011 by including certain bank costs Congress said could not be included. In a separate case brought by Kentucky’s Linney’s Pizza, another judge said the disputed costs could be included. Both rulings are under appeal, but MPC has said the 2023 proposal didn’t change what costs are considered, so the litigation should not keep a reduction from moving forward.
Debit card swipe fee regulation has saved merchants an estimated $9 billion a year with about 70% shared with consumers, largely by holding down price increases, and the rest used to hire more employees, pay them more and open additional stores.
Debit card swipe fees cost merchants and their customers $40.5 billion last year, according to the Nilson Report. When credit cards are included, swipe fees totaled $198.25 billion and have risen 80% since the pandemic. The fees are most merchants’ highest operating cost after labor and too much to absorb, driving up consumer prices by more than $1,200 a year for the average family.
About MPC
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants. Follow MPC on Twitter, Facebook or LinkedIn for the latest on swipe fees.
