Fees charged to merchants by banks for credit card transactions could cost consumers more than $20 billion this holiday season, as businesses are forced to increase their prices to cover the growing burden of so-called "swipe fees."

The rate businesses are forced to pay for swipe fees is tied to the payment network of the specific card the customer runs, subjecting merchants to whatever the bank attached to the card is charging. According to The New York Times, Visa and Mastercard control more than 80% of the market for credit and debit cards, affording them a unique duopoly that allows them to dictate what the vast majority of businesses have to pay for each swipe. 

Congress is currently looking to address that with the bipartisan Credit Card Competition Act (CCCA), which would require large banks like Visa and Mastercard to offer merchants options for smaller, more affordable payment networks. That said, it's been two years since the CCCA was first introduced, and until it passes, businesses will continue to be faced with limited options. 

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For this upcoming holiday shopping season, payment system consultancy firm CMSPI estimates that roughly 85% of purchases will be made using credit or debit cards, totaling at least $20 billion in swipe fees, up from more than $18 billion over that same period last year. The Merchant Payments Coalition (MPC) estimates that swipe fees have increased by 50% since the pandemic, and hit a record $172 billion in 2023. The MPC further notes that swipe fees represent the highest operating cost for a business after labor, often leading to increased prices for customers. 

“Inflation is coming down but swipe fees keep going up, taking a bigger slice out of what it takes to put presents under the tree,” MPC executive committee member Stephanie Martz said in a December 4 news release urging Congress to pass the CCCA. "With swipe fees higher here than in other countries, our children get fewer presents for the money than kids in Great Britain, France or even China.

The status of the CCCA remains unclear headed into the new year. Although incoming Vice President JD Vance was one of the initial co-sponsors for the bill when it was first introduced, he has not addressed the measure recently. President-elect Donald Trump has also frequently spoken out against the role of the federal government in regulating banks and businesses.