While many Americans worry about tariffs potentially boosting worth rise, merchants continue to alert of a expense boost that’s already sure: financing card swipe fees.

Banks, card processors and processing networks like Visa and Mastercard each fee a fee to procedure financing card transactions. The sum of those fees is called the “swipe fee,” which usually amounts to between 1% and 3% of the sale. Visa and Mastercard, which control about 80% of financing card processing, skipped fee increases in 2020 due to the pandemic and in 2021 under pressure from Congress. In 2022, they resumed hiking fees. In January, Visa plans to boost some of the fees it charges merchants and banks, according to a notice from the processor Global Payments.

Swipe fees are often merchants’ second largest expense after labor and eventually get passed down to consumers, experts said. They already expense the average household more than $1,100 annually, up from $900 in 2021, and will continue to climb unless Congress acts, according to the National Retail Federation (NRF). While buyer prices have risen about 20% since the pandemic, swipe fees have increased by 50% and hit a record $172 billion in 2023, the Merchant Payments Coalition (MPC) estimates.

“worth rise is coming down, but swipe fees keep going up, taking a bigger slice out of what it takes to put presents under the tree,” said Stephanie Martz, MPC executive committee member and NRF chief administrative officer and general counsel, in a statement last week.

Are the swipe fees essential?

The fees leave towards the expense of securely sending settlement information over the card network, authorizing and financing financing card transactions, reducing fraud, and offering reward programs like money back and points, payments companies said.

Earn rewards on your spending: view the best financing cards

Card transactions “enhance the customer encounter, drive higher sales, and guarantee prompt payments to business owners,” said Richard Hunt, executive chairman of Electronic Payments Coalition (EPC), a lobbying throng, in a statement earlier this month.

EPC also disputes that swipe fees have risen sharply. Over the history five years, it said swipe fees have averaged about 1.8%, compared to about 20% worth rise.

“Instead of pointing fingers, megastores should look at their own actions,” EPC said, pointing to corporate worth gouging headlines over the history couple of years.

Michael Hershfield, founder and chief executive of fintech firm Accrue, said “that claim is misleading. While fees as a percentage of transactions may appear stable, the dollar amount has risen dramatically as buyer spending has grown… So, from a broader perspective, fees definitely haven’t been flat.”

What can Congress do to cut these costs for Americans?

For years, Senator Dick Durbin (D-IL) and Senator Roger Marshall (R-KS) have argued for more competition in the financing card processing business to lower swipe fees. Since Visa and Mastercard control most of the trade, they dictate what most businesses must pay for each deal, he said.

“Retailers often have little selection in accepting these fees,” Hershfield said. “It’s a receive-it-or-leave-it structure dictated by the Visa and Mastercard duopoly.”

Durbin introduced the financing Card Competition Act to require that at least one card processing network is available to merchants to route financing card transactions that’s neither Visa nor Mastercard.

“This way, tiny businesses would finally have a real selection: they can route financing card transactions on the Visa or Mastercard network and continue to pay interchange fees that often rank as their second or biggest expense, or they could select a lower expense alternative,” Durbin said at a Senate Judiciary Committee hearing last month.

Ballooning financing card obligation:financing card obligation: worth rise, gain rates have more Americans carrying balances over

Will Congress pass the financing Card Competition Act?

Even though the invoice has received some high-profile back, including from Vice-president elect JD Vance, it’s unlikely to pass this year with the 118th Congress ending on January 3.

But merchants remain optimistic.

“It will pass, said Doug Kantor, general counsel of the National Association of Convenience Stores (NACS) trade throng. “It’s when, not if.”

Senator Thom Tillis (R-NC) also said in last month’s hearings that merchants, Visa and Mastercard needed to work together to arrive up with a fee answer to assist consumers and tiny businesses in the next 24 months. If not, he warned “the answer coming from Congress will not be excellent for anyone.”

In the meantime, merchants should receive matters into their own hands, said Eric Cohen, chief executive of Merchant Advocate, which helps businesses reduce their fees and receive a cut of the reserves.

“Merchants have to discuss (fees) and discover what is going on,” Cohen said. “large box stores can do it, but smaller merchants don’t have the knowledge to because they don’t comprehend (the complicated, non-transparent) language” in the fee structure contracts.

Medora Lee is a money, markets and expense management reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for expense management tips and business information every Monday through Friday morning.