WASHINGTON—The Merchants Payments Coalition, which never lets a holiday or event in the news pass without leveraging it to highlight interchange fees, has released a new statement that “huge profit increases reported by major card-issuing banks come as they are collecting as much as $58 million a day in credit card ‘swipe’ fees on gasoline and diesel as fuel prices soar because of the conflict in Iran.
“Big banks and card networks are seeing a windfall as fuel prices rise,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said in a statement. “It doesn’t cost them any more to process gas purchases at $4 a gallon than it did at $2, but they are collecting more on every gallon and profiteering on the backs of American motorists. Swipe fees drive up the price of gas in the family car but do the same for the diesel that fuels tractor-trailers, ultimately adding to the price of every product delivered over our nation’s highways. This is part of the swipe fee ripoff condemned by President Trump, and it’s time for Congress to follow his lead by bringing competition to these price-fixed fees.”
‘Astonishing’ Profits
In its statement, MPC noted that JPMorgan Chase, the nation’s largest issuer of Visa and Mastercard credit cards, reported this week that net profits for the first quarter were up 13% year over year and totaled $16.5 billion on revenue of $49.8 billion, while number-two card issuer Citigroup said net profits were up an “astonishing 42% year over year” at $5.8 billion, and other large banks also posted big increases.
“Based on those figures, JPMorgan Chase had a profit margin of 33%, Citigroup 24% and Wells Fargo 25%,” the MPC said. “Profits are even higher at Visa, at 54%, and Mastercard, at 47%, both as of January. By contrast, net profits for merchants average about 3%.”
‘$58 Million a Day’
The growing bank profits are being driven, in part, by higher swipe fees on fuel, the organization said, stating that credit card swipe fees on the average $4.14 gallon of gasoline amounted to 9.8 cents as of April 7, according to MPC’s Fuel Price/Swipe Fee Tracker, while swipe fees on the average $5.65 gallon of diesel were 13.3 cents.
“Based on average daily fuel consumption and the average swipe fee rate of 2.36%, fees on gas and diesel combined would amount to $58.3 million a day if all fuel purchases were paid for with credit cards,” MPC said. “That was up 19% from $49 million a day when MPC launched the tracker a month earlier.”
The organization repeated its call for passage of the Credit Card Competition Act.
