Grocers Push for Federal Reserve Swipe Fee Reforms
Grocers from across the United States met in Washington, D.C., Thursday to urge lawmakers to expedite implementation of debit card swipe fee reform that was included in the bipartisan Dodd-Frank Wall Street Reform and Consumer Protection Act passed by Congress last year.
“Grocery stores make an average profit of less than 2 cents on the dollar. It’s a very competitive industry. The big banks make more money per transaction from swipe fees than what the store will make in profit. Every month that reform is delayed means $1.3 billion a month in banks and card company pockets,” said Leslie G. Sarasin, Food Marketing Institute president and CEO. “It is imperative that these reforms go into effect this year so Main Street businesses and their customers benefit from a more fair and transparent process.”
Peter Larkin, president and CEO of the National Grocers Association, agreed. “Grocers, other merchants, and the government have been fighting these anticompetitive fees for more than a decade,” he said. “Every month of delay takes a billion dollars in swipe fees from food retailers and their customers.”
The Federal Reserve expects to finalize its proposed rule in time to meet the July 21 implementation date set by Congress. Two separate bills have been introduced on Capitol Hill seeking to delay the final rule.
Grocery store owners are meeting with lawmakers, encouraging them to stand up for their businesses and their customers. Debit card interchange swipe fees have continued to increase since the passage of debit card fee reform last summer. The cost of accepting debit cards is among the fastest growing expenses for small businesses. Uncertainty about debit card swipe fee rates makes it difficult for businesses to plan ahead, budget and make hiring decisions.
“Interchange reforms are a strong step toward transparency and competition,” Sarasin said, “and they will provide grocers the ability to more efficiently plan their operational costs for the benefit of their customers.”
Larkin added: “Food retailers compete every day on price by offering quality products at low prices to consumers. The food retailing industry is a penny business and the big banks have been taking nearly 50 times that every time a consumer uses a debit card in a supermarket. These transactions are nothing more than electronic checks and retail grocers believe strongly that the Federal Reserve should be permitted to determine what are reasonable swipe fees to create competition in the marketplace.”
Food Marketing Institute conducts programs in public affairs, food safety, research, education and industry relations on behalf of its 1,500 member companies — food retailers and wholesalers — in the United States and around the world. FMI’s U.S. members operate approximately 26,000 retail food stores and 14,000 pharmacies.
The National Grocers Association is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry.