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While Colorado largely outpaced the nation in reducing inflation, new data shows prices are back on the rise. Everyday necessities like meat, poultry, and eggs are getting harder to afford, and for Coloradans in particular, things like healthcare, apparel, and gas are spiking.

Exit polls showed inflation, scarcity of jobs, wages, and housing costs were key issues that voters in Colorado were the most anxious to see solved. While a new administration settles in, it’s critical Congress does not lose focus on the cost of living issues that matter most to voters. 

For example, the hidden expenses of egregious credit card swipe fees remain a significant burden for small businesses, often contributing to rising costs as merchants are forced to balance the budget by increasing prices. While there’s no silver bullet for inflation, they can tackle excessive swipe fees by swiftly passing the Credit Card Competition Act (CCCA).

Every time a customer makes a credit card purchase, a percentage of the total transaction is charged to the merchant, called a swipe fee. These fees quickly add up, becoming the second highest operating expense behind labor for many businesses.

With such a major impact on the budget it’s easy to see how swipe fees have become an inflation multiplier. As prices rise, so too do the fees taken by credit card companies, which creates an aggressive cycle as merchants continue seeking to address the increased overhead by raising prices again and again. All of this has contributed to the amount of swipe fees paid over the last decade more than tripling.

For consumers, this means paying additional $1,100 a year on average in higher prices as a result of swipe fees. Even worse, is the burden on low-income individuals who are often under-banked and more likely to rely on cash as a form of payment. Therefore, those with a lower income are subsidizing the rewards and benefits that higher income individuals reap from using their premium credit cards. Through this process, it’s estimated that those who make less than $75,000 a year are transferring over $3.5 billion to those making more than $75,000.

Despite their immense burden on businesses and their inequitable distribution among consumers, there is little to no transparency into how these swipe fees are structured and charged. This is largely by design thanks to the duopoly that controls the credit card industry, Visa and Mastercard. These two corporations have dominated the sector with over 80 percent of the market share, using their control to sideline competitors and ensure their fee rates continue to rise unchecked. It’s estimated Colorado retailers paid $2 billion in credit card swipe fees in 2023 alone.

With no motivation for Visa and Mastercard to reduce their fees to reasonable rates, it’s incumbent upon Congress to act if businesses and American families are going to see any relief.

The CCCA would give those who accept credit card transactions at least two different routing network options when processing a credit card. This means other networks like Pulse and SHAZAM that have operated effectively in the debit space, could begin competing in the credit card market. More options on the table means Visa and Mastercard will be encouraged to lower their swipe fees as other companies offer similar services, if not better, services for cheaper.

In Colorado, the CCCA is estimated to save businesses and consumers in excess of $300 million per year. These savings would have an incredible impact on Colorado’s economy allowing small businesses to expand and lower prices which in turn would relieve the burden on some of our most financially vulnerable families. 

I hope our Sens. Michael Bennet and John Hickenlooper will throw their support behind the CCCA and work to pass it this session. Coloradans will not escape rising prices if Congress refuses to act on swipe fees.

Sara Cox is the owner of The Crown in Breckenridge.