Credit card fees cost Kansas businesses. Lawmakers can give them relief | Opinion

As the Kansas Legislature convenes for a new session, lawmakers are balancing a full slate of priorities — from reducing the state budget to teaching and education reform. But for the more than a quarter-million small businesses across the state, credit card swipe fees — surcharges added by the card-issuing companies — continue to eat away at our bottom lines like an unwanted subscription fee we never signed up for.

As lawmakers in Topeka explore ways to make the state more competitive, addressing these excessive fees should be part of that conversation.

When a customer enters one of our grocery stores and uses their credit card at the register, we’re on the hook to pay a swipe fee — generally between 2% and 4% — to the credit card network and issuing bank. This hidden surcharge was initially introduced to offset the cost of a transaction, but over weeks, months and years, swipe fees have become a serious financial drain.

Nationwide, small businesses paid an estimated $148 billion in credit card swipe fees in 2024 — $12 billion more than the year before. For independent businesses like ours, these rising fees come without transparency and without warning, forcing tough decisions about pricing, staffing and reinvestment.

Worse, the costs don’t stop with merchants. They ultimately land on Kansas families in the form of higher prices or added surcharges at checkout. Studies show the average household pays roughly $1,200 more each year because swipe fees are embedded in the cost of everyday goods and services.

The root of the problem is a lack of competition. Visa and Mastercard control roughly 80% of the credit card market, giving them enormous power to raise fees unilaterally. For businesses that want to accept credit cards — a necessity in today’s economy — there’s little choice but to pay whatever rates they set.

Despite recent legal headlines suggesting reform, swipe fees are only expected to continue rising. Meaningful relief won’t come unless lawmakers step in.

One commonsense idea to chip away at the issue would be to prohibit card companies from charging swipe fees on non-revenue-generating portions of transactions. This includes things such as taxes, tips and other pass-through charges that don’t contribute to a merchant’s bottom line. Lawmakers in Topeka introduced a bill just like it in the last session, but it failed to advance out of committee.

Our state’s congressional delegation can help, too. The bipartisan Credit Card Competition Act — led by our state’s very own U.S. Sen. Roger Marshall and supported by Missouri Sen. Josh Hawley — would require the largest banks to include at least two processing networks beyond Visa or Mastercard on their credit cards. This would allow merchants to choose the credit card processing network that offers the most competitive fees, compelling Visa and Mastercard to lower their swipe fee rates in the process.

If passed, the Credit Card Competition Act is expected to save consumers roughly $16 billion annually. And with Visa and Mastercard reporting profit margins as high as 50%, returning some of that money to hardworking Kansans is long overdue.

This legislative session, Kansas lawmakers have an opportunity to stand up for small businesses and consumers alike. Addressing excessive swipe fees would bring transparency to the payments system, lower hidden costs for families and help keep Main Street strong across our state. It’s a practical step that would make a real difference — one swipe at a time.

Mike Beal is chief financial officer of Balls Food Stores, which operates 25 retail grocery stores in the greater Kansas City metropolitan area.