American Express’ model makes money from charging merchant fees on a per purchase basis (swipe fees), whereas MasterCard/Visa charges consumers interest on balances. Due to the discrepancy in business models, it’s argued that American Express can charge a higher swipe fee than its competitors, though Premium MasterCard and Visa also charge higher fees.
How they voted:
The argument of the National Retail Federation is that higher swipe fees ultimately get passed down to the consumer and by pushing swipe fees to the merchant, consumers are unable to make informed purchase decision. Whether this is true or not, remains to be seen. Personally, I have yet to be charged more for Amex purchases but I’m aware the inequity existed before this cash and try to use cash as much as possible for small businesses.
In the advent of increased mobile purchases using a linked credit card, will swipe fees effect consumer pricing?