BA Joins Push to Rein In Swipe Fees Squeezing Breweries

The Brewers Association (BA) joined a broad coalition of small-business trade organizations in a letter to House Committee on Financial Services leadership for the June 24 hearing on "Future of Payments: Promoting Innovation and Fair Markets." The coalition letter urges Congress to address one of the most persistent and fastest-growing costs facing small businesses: credit card swipe fees.

Current Situation

The credit card payment system is dominated by Visa and MasterCard, and merchants have few realistic alternatives to accept cards that do not run over those networks. That market power allows fees to increase with little to no competitive pressure. Since 2014, swipe fees have more than tripled, outpacing inflation twofold.

Every additional swipe fee increase cuts into revenue that could otherwise support employees, equipment purchases, expansion, community events, and reinvestment in the business. The unfortunate decision businesses face is whether to pass these fees on to the consumer. Annual total credit card fees are already estimated to amount to $1,200 to $1,800 per American family - a significant burden at a time of strained consumer purchasing power.

What the Credit Card Competition Act Would Do

The letter calls on Congress to support the Credit Card Competition Act (CCCA), which would introduce needed competition into the credit card market. The CCCA would require the largest credit card-issuing financial institutions, those with more than $100 billion in assets, to allow at least two unaffiliated networks to process covered credit card transactions. Rather than setting prices, the bill would give merchants routing choice and create an incentive for networks to compete on price, service, and security.

The coalition letter makes clear that real innovation cannot thrive in a market controlled by a small number of dominant players. Without congressional action, the dominant networks and banks could use their current market power to shape the next generation of payments in ways that preserve the status quo rather than create true competition. Congress has an opportunity to bring needed competition to the payments system before today's dominant players become tomorrow's entrenched monopolies.

Why This Matters

Independent breweries employ local workers, support farmers and suppliers, contribute to tourism, and serve as gathering places in communities across the country. Swipe fees are not a marginal cost for breweries. They are a recurring, unavoidable expense tied to nearly every taproom pint, food sale, and merchandise purchase made by card. Greater competition in payments would help keep more of each sale in these small businesses and provide brewers with more predictability in an already challenging operating environment.

The BA will continue to advocate for policies that reduce unnecessary costs on small and independent breweries and support fair competition in the marketplace.

• Read the full coalition letter
• More on the Credit Card Competition Act