Richard Boykin, Candidate for 7^th Congressional District Seat, Calls for National Legislation to Eliminate Unfair Swipe Fee Charges and Protect Consumers

Richard Boykin, candidate for Congress in the 7^th district, called for national legislation today to eliminate unfair “swipe fees,” which are paid by businesses to banks and payment processors for every consumer debit or credit card transaction. In turn, many businesses pass the fee costs on to consumers in the form of surcharges or higher prices.

Attorney Boykin noted, “Yesterday, a federal judge validated the state of Illinois’ landmark law banning many credit card swipe fees. This is a step in the right direction for protecting consumers and businesses from excessive charges. By eliminating burdensome fees, we can put more money in the pockets of families struggling to make ends meet.”

“Swipe fee rates are mostly set by the dominant credit card networks – Visa, Master Card, American Express and Discover, who collectively set 70% to 90% of the total fee charged for each transaction. This fee is non-negotiable and must be paid by the merchant. Why should consumers be penalized for supporting efficient business operations? With a simple swipe or touch of a debit card, credit card, or mobile phone, consumers are helping businesses to deliver thousands of goods and services quickly and effectively at the point-of-sales. Since consumers act rationally and efficiently, merchants can save time because they do not have to manage as many cash transactions. Also, merchant bank accounts are updated in real-time. However, consumers do not receive financial benefit from doing their part. Merchants pass on processing costs to consumers,” Boykin added.

The big financial institutions control the marketplace at the expense of consumers and businesses. In fact:

Candidate for Cook County Board President Richard Boykin in the June 28, 2022 Democratic Primary election

Swipe fee amounts depend on the type of card used, the nature of the business, the volume of transactions, and the average value of transactions. Consumers do not control these factors and do not know how much the fees cost. The fees can range from 2.25% to 3.35% of the transaction for credit card transactions. The amount is less for debit card transactions.
Federal law exempts debit card-issuing banks and credit unions worth $10 billion or less from existing swipe fee caps.
Debit card fees differ based on whether a customer is required to enter a PIN number or sign a sales receipt. The fee is hidden from customers.
Credit card companies make more money from swipe fees when consumers use credit cards, reward cards, premium cards, and business cards. Also, card-issuing banks use swipe fees to fund their cash reward programs. The fee rate is higher for credit cards that offer higher cash rewards program.
When a business is in a credit card network, they must accept high reward cards and, therefore, pay higher fees to the network provider. In turn, those higher fees are passed on to all consumers, including consumers who pay by cash or with debit cards. That is very unfair.
Many businesses cannot afford to be in the electronic payment processing network and are forced to take cash only.

Boykin stated, “As Congressman, I will sponsor legislation to regulate swipe fees and bring down the cost of goods and services.” The legislation will:

End the PIN vs. signature receipt fee-price difference and charge a uniform fee.
Require credit card companies to charge a uniform swipe-fee for reward cards.
Cap the amount credit card companies can charge businesses for swipe fees.
Eliminate the debit card swipe fee exemption for financial institutions valued at $10 billion or less.
Eliminate all swipe fees for debit and credit card purchases of groceries, medical expenses, and public transit cards, such as the Chicago Transit Authority’s VENTRA card.

Boykin noted that his position on eliminating swipe charges is part of his comprehensive plan to protect consumers and businesses and promote economic justice. (see Position Papers — Richard Boykin for Congress) He called for federal action to:

Protect the financial system from market manipulation
Eliminate unfair bank fees
Lower credit card interest rates
End surge pricing abuse.

“Throughout my career, I have fought on behalf of fairness for consumers and families. As Cook County Commissioner, I led the charge to eliminate the sweetened beverage tax imposed on consumers and businesses. As Congressman, I will bring the fight to Washington,” Boykin said.

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Ray Hanania is an award-winning opinion columnist, author & former Chicago City Hall reporter (1977-1992). A veteran who served during the Vietnam War and the recipient of four SPJ Peter Lisagor Awards for column writing, Hanania writes weekly opinion columns on mainstream American & Chicagoland topics for the Southwest News-Herald, Des Plaines Valley News, the Regional News, The Reporter Newspapers, and Suburban Chicagoland.

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