Credit Card Swipe Fees Hit Record $198 Billion, Fueling Reform Push
Credit card swipe fees reached a staggering $198 billion last year, and with costs up 80% since the pandemic, the call for swipe fee reform and passage of the Credit Card Competition Act are getting louder.
When you tap your credit card at a store, you probably don't think about the hidden cost that comes with that convenience. These "swipe fees," charged to merchants for every transaction, reached a staggering new record of $198.25 billion in 2025. This hidden cost ultimately affects the prices everyone pays, and its rapid growth is prompting renewed calls for significant changes to the system.
Soaring Swipe Fee Costs
The fees merchants pay to accept credit and debit cards have been climbing at a startling rate. The 2025 total represents a 5.9% increase from the $187.2 billion collected in 2024, according to data from the Nilson Report. Looking back further, the trend is even more dramatic. Since the COVID-19 pandemic, these fees have surged by 80%, and they have increased a massive 219% from the $62.1 billion recorded in 2009.
Breaking down the 2025 numbers:
- Credit card swipe fees made up the bulk of the total, reaching $157.8 billion.
- Debit card swipe fees accounted for the remaining $40.5 billion, an increase from $38.7 billion the previous year.
Visa and Mastercard Fee Breakdown
The majority of swipe fee revenue is collected by the two largest card networks, Visa and Mastercard. Fees for their credit cards alone totaled $118.8 billion in 2025. This figure marks a stunning 365% increase from the $25.6 billion they collected back in 2009.
It's not just the total dollar amount that's growing; the rate merchants are charged is also on the rise. In 2025, the average swipe fee for a Visa or Mastercard credit card transaction was 2.36%. While that may seem like a small percentage, it's a notable increase from the 2.02% average rate in 2010 and represents billions in additional costs for businesses nationwide.
Impact on Merchants and Consumers
For most businesses, swipe fees are their highest operating expense after labor, according to the Merchants Payments Coalition (MPC), an organization representing retailers, supermarkets, and other merchants. These costs are especially difficult for small businesses to absorb, often forcing them to pass the expense on to customers through higher prices.
"Credit card swipe fees make just about everything Americans buy more expensive," explains Doug Kantor, an MPC Executive Committee member. Essentially, this system means that all consumers, including those who pay with cash, are helping to cover the cost of credit card processing and rewards programs through inflated shelf prices.
The Push for Swipe Fee Reform
In response to these ever-increasing costs, a diverse coalition of business groups, labor unions, and lawmakers is pushing for reform. The centerpiece of their effort is the Credit Card Competition Act, bipartisan legislation aimed at breaking the dominance of Visa and Mastercard.
The proposed law would require large banks that issue credit cards to enable them to be processed over at least two unaffiliated networks—one of which could not be Visa or Mastercard. Proponents argue this would inject much-needed competition into the market, giving merchants more choices for processing transactions and ultimately driving down the fees they have to pay. The goal is to create a more transparent and competitive system that benefits both businesses and the consumers they serve.