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By Tom Hoye
In a recent opinion piece for the Taunton Daily Gazette, the author made the claim that consumers in Massachusetts “don’t need to be concerned with credit card ‘swipe fees.’” However, this could not be further from the truth. Costs are still on the rise for families in Massachusetts, and with the holiday season in full swing, that is more relevant now than ever before. While tariffs are certainly taking their toll, the impact of credit card swipe fees cannot be ignored as they now make up the second largest operating expense for business owners and drive prices higher for consumers.
While businesses in Massachusetts cannot add an upfront surcharge to account for swipe fees, there’s no doubt that when these fees rise, merchants are forced to increase prices across the board to keep their doors open. This means even those who use cash end up paying higher prices as a result of card users. Surcharging is just a band-aid for retailers to recoup some of these costs — but it is not a solution. Retailers don’t like them either as they get blamed for the credit card’s outrageous fees. Massachusetts law might block a line item surcharge, but make no mistake that merchants and consumers are still paying swipe fees.
The more those fees grow, the more merchants will have no choice but to raise their prices to account for the overhead, just as they would for any other expense. In fact, families here in state and across the country are paying an extra $1,800 a year on average as prices increase to account for the growing expense of swipe fees.
Whenever you swipe a credit card at your favorite restaurant or local shop, the business owner incurs a swipe fee, which is a percentage of the transaction that’s paid to credit card companies and major banks. In other words, Massachusetts’ small business owners have to watch while a portion of their hard-earned revenue is siphoned away from their communities to line the pockets of executives on Wall Street. In 2024 alone, our state paid over $2.9 billion in swipe fees, money that could have been used to increase wages, improve employee benefits, and lower costs.
Unfortunately, thanks to credit card companies, this issue will not fix itself. These companies dominate the payments industry, and increase swipe fees without hesitation thanks to the cartel-style price fixing scheme they’ve employed with major banks to ensure fees continue going up. Massachusetts simply can’t afford the status quo, especially as the cost of living exceeds the national average and the cost of things like raising a child in this state is 50 percent higher than the rest of the country.
It’s clear we need a legislative fix to level the playing field and thankfully one already exists in the form of the Credit Card Competition Act.
This bill, a bipartisan initiative supported by both Democrats and Republicans as well as the overwhelming majority of the public, would offer merchants and consumers the relief they’ve been seeking for years by allowing businesses to choose between at least two credit card networks for processing transactions. By fostering a competitive environment, the Credit Card Competition Act would incentivize credit card companies to lower their swipe fees and improve their services. The bill would save Massachusetts businesses and consumers an estimated $438 million a year, allowing merchants to not only pay their employees more but also lower prices for their customers who are still reeling from inflation and economic uncertainty.
The deck is stacked against Main Street when it comes to swipe fees. The only beneficiaries are Wall Street executives and bank CEOs. Until the Credit Card Competition Act is passed, swipe fees will continue burdening our local businesses and putting pressure on families who are already struggling to afford necessities. The Credit Card Competition Act can truly shake the status quo and bring about the change we desperately need. I hope U.S. Sens. Elizabeth Warren and Ed Markey along with our entire congressional delegation will take this message to heart and throw their support behind this bill.
Tom Hoye is the former mayor of Taunton. He is currently the register of probate for Bristol County and the owner of several businesses.
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