WASHINGTON – There’s more involved in rising gas prices than most drivers probably might suspect.
A part of the price of fuel helps gas retailers offset the cost of credit card swipe fees.
“Banks make more money off these transactions than the person selling you the gasoline make, and that’s been true now for six years in a row,” says Doug Kantor, counsel to the National Association of Convenience Stores.
Buy gas or any product with a credit card and banks dealing with Visa and Mastercard get a flat fee for the transaction, as well as a percentage of the sale.
These fees rose by about 180 percent between 2004 and 2011, according to an analysis by the National Association of Convenience Stores, while gas prices rose about 80 percent.
Retailers trying to offset swipe fees either pass those costs on by charging about 7 cents more per gallon, or they go out of business, Kantor says.
The Electronics Payment Coalition takes issue with those claims and the characterization that rates have changed 180 percent in recent years. Credit card swipe rates have stayed level, spokeswoman Trish Wexler tells WTOP.
Even if the rate itself stays the same, retailers pay more as consumers spend more, says Wexler, because the rates are percentages.
Retailers got an $8 billion windfall last year when Congress adjusted debit card rules allowing retailers to pay banks less for debit card transactions, Wexler says.
Half of all transactions at the pump happen with debit cards, according to a survey by Phoenix Marketing that Wexler cites.
“Right now there’s no evidence retailers are passing any of those savings along to their customers,” she says, citing a study from WheresMyDebitDiscount.com.
Kantor says Congress should pass legislation addressing swipe cards fees.