Merchant ‘swipe fees’ outnumber consumer overdraft fees for first time in history
Banks and financial institutions collection nearly $33.8 billion in credit card interchange fees last year, which outnumbered the $33.3 billion consumers were charged in overdraft fees. It’s the first time that’s ever happened, according to Moebs Services.
Merchant “swipe fees,” as they’re often referred to, have doubled in the past eight years, a representation of the way banks are doing business, wrote Maria LaMagna of MarketWatch.
Rates for credit card transactions are typically percentage-based, often in the 1- to 4-percent range, while debit card purchases usually carry a flat fee per transaction. With credit card transactions being so much more lucrative for banks — and costly for merchants — financial institutions have upped the appeal of using credit cards with cash-back rewards and other benefits.
It’s apparently working.