Georgia Association of Convenience Stores

Press Release: Study Shows Georgia Consumers Have Benefited From Passage of Swipe Fee Reform

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CONTACT: Jim Tudor - Georgia Association of Convenience Stores (GACS) - 770-736-9723



Study Finds Cutting Debit Fees Saved Georgia Consumers $163.5M in Lower Prices & Created 1046 New Jobs

DALLAS, GA —According to a new economic report released today by the Merchants Payments Coalition, debit card swipe fee reform has accomplished much of what Congress intended when it passed debit reform legislation in 2010 by pumping a significant infusion of savings and jobs into state economies across the country.

The report, named The Costs and Benefits of Half a Loaf: The Economic Effects of Recent Regulation of Debit Card Interchange Fees, can be found at the link below, or at the MPC web site,

In Georgia, the lower debit card swipe fee, which the Federal Reserve dropped from 48 cents per transaction to 24 cents, allowed Georgia merchants to reduce costs, saving consumers $163.5M and spurring the creation of 1046 new jobs in 2012.

The report also measured the potential impact on the U.S. economy had the Federal Reserve followed the language of the law. The Federal Reserve, for example, originally proposed a rate of at most 12 cents per debit swipe. In Georgia alone, $77.8M would have been generated in consumer savings along with an additional $34.9M in merchant savings and this would have been sufficient enough to support an additional 497 jobs.

Furthermore, had credit card swipe fees been reduced to 24 cents per transaction, Georgia consumers would have saved an additional $429.7M, merchants would have saved another $192.5M, and 2752 new jobs would have been created last year.

The report uses a 24-cent interchange fee for credit card transactions as a reference. The actual number could be higher or lower. The reference is well above the pending European Commission’s proposal to cap credit card swipe fees at 30 basis points (i.e. 3/10 of 1%). At that level, the swipe fee on the average $40 retail transaction would be 12 cents. This figure was used as an objective example of the fees, savings and jobs that might result from credit reform but was not a statement as to what the most appropriate credit card swipe fee level would be.

“It’s abundantly clear that debit card reforms implemented under the Durbin Amendment have lowered prices, and its effects are having a positive impact on our small business members,” says Neal Anderson of Glennville, GA based Clyde’s Markets, who serves as Chairman of the Georgia Association of Convenience Stores (GACS). “It’s imperative that we keep moving forward with swipe fee reform. It’s already proven to be a winner for our customers throughout Georgia.”

Jim Tudor, GACS President, added that “Sixty three percent of convenience stores are operated by single store owners. Small business owners such as these have historically been the primary drivers of job creation in Georgia. Swipe fee reform is a major step in helping our members to boost the cash reserves necessary to invest in their stores and expand their employee base.”

In addition to the economic report, MPC also released state-by-state numbers (see link below) for consumer savings, merchant savings and jobs with swipe fees reduced to 24 cents for both debit and credit cards and to 12 cents for debit cards. MPC calculated the state-by-state numbers by distributing them proportionally to states’ share of the U.S. gross domestic product.

The report was compiled by internationally-respected economist and advisor to Presidents, Prime Ministers and Fortune 100 companies Robert Shapiro of Sonecon LLC. Shapiro analyzed the Durbin Amendment of the Dodd-Frank “Wall Street Reform and Consumer Act,” which was created to rein in runaway swipe fees levied on merchants and consumers every time a debit card was used to pay for a purchase.

Viewed from a national perspective, the savings and jobs numbers are significant and would help revive the country’s sluggish economic recovery. The major findings of the report include:

• Reducing the cost for merchants to swipe debit cards put $5.8 billion back into the hands of consumers across the country through lower prices, which led to increased spending and helped create 37,501 new jobs in 2012. Merchants realized savings of $2.6 billion.

• These savings and job gains, however, could have been substantially larger had the fee been cut to 12 cents as originally recommended by the Federal Reserve. If that cut had been implemented, an additional $2.79 billion would have been generated in consumer savings, $1.2 billion in merchant savings and 17,824 more jobs would have been created.

• If credit card swipe fees had been reduced to 24 cents, consumers and merchants would have realized an annual savings of $22.3 billion, generating a total of 98,600 jobs every year. All told, with improved debit reform and credit reform, the savings to consumers and merchants would be $34.9 billion and nearly 154,000 jobs would be created annually.

“Making debit card reform consistent with the law we already have and reforming credit card swipe fees would be a tremendous boost to Georgia” says Jimmy Cain, GACS Chairman-Elect, from PetroSouth, based in Griffin, Georgia. “The study has already shown the benefits from a partial implementation. We need the lower prices and jobs that full swipe fee reform would give us now.”

Credit card swipe fees continue to gouge merchants and consumers. The fee, which can be as high as four percent of the transaction and often exceeds what the merchant earns on the sale, is the second highest operating expense for merchants, trailing closely behind labor costs. Consequently, merchants often have no choice but to pass a portion of this expense down to consumers in the form of higher prices irrespective of their form of payment.

As it stands now, Americans pay the highest swipe fees in the industrialized world, eight times more than in Europe. Although the cost to process these transactions has fallen given improvements in technology, the swipe fee for credit cards continue to skyrocket. All told, swipe fees generate approximately $50 billion for banks every year. Visa and MasterCard, who together control 80% of the card market, set these fees in secret so that banks don’t compete on price.

Complete Copy of Shapiro Report Available

Download the complete Shapiro Study from MPC.

MPC State by State Numbers

Download the MPC State by State Numbers.

Read more about debit and credit reform here:

Download report - The Facts about Debit Reform

Download report - The Facts about Credit Card Swipe Fees

The Merchants Payments Coalition - is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees.

Visit MPC Web Site -


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