Credit Card Swipe Fees Likely to Rise in July, Hindering Mobile Payments

Credit cards are easily one of the biggest, if not the actual biggest, mobile payments methods around. They work as a mobile payments platform themselves, and they also work as a major support method for e-wallet systems, which is what we generally think of when we think “mobile payments.” For those who accept credit cards, however, the price of doing so is about to go up, as noted by reports sent our way from CardX.

Originally, the fee hikes were set to take place in April, but it’s easy to see why that didn’t go through. Now, the new date for the fee hikes will hit in July instead, a move which has some retailers breathing a quiet sigh of relief, though one that’s shaky with concern.

Some merchants would actually see fees go down under the new fee scheme, but many others would see some new gains, potentially even fairly large ones. The money realized from these fees goes toward reward systems for credit card holders.

Any change in swipe fees reflects a serious potential blow to retailers of all stripes; commonly, swipe fees represent the second-largest operating expense to businesses, just behind payroll. While certainly, these merchants will see some relief from the recent passage of the CARES Act, the impact of this measure will be limited if swipe fees are altered at the same time.

CardX, for its part, offers a complete turnkey tool that allows businesses to better track the impact of swipe fees on their own operations, providing at least better clarity and certainty on that line item of spending.

While there’s a certain value in raising fees—better rewards programs prompt more card use, which means more things get bought in general—it may be that now is not the time for such moves. Pushing these back even a year might be for the best. While we’re all hopeful that businesses will be able to reopen in May—or maybe even April if the current guidelines get relaxed—businesses will need that long just to properly restart.

Improving rewards and mobile payment accessibility isn’t a bad plan, but now isn’t the time to go upsetting the apple cart. A more substantial delay will not only demonstrate good faith to the businesses that take cards, but also to the end users who put them to work.