NACS Shines Light on Hidden Bank Fees

Cost consumers up to 10 cents extra at pump, new study finds

WASHINGTON -- Drivers are paying six to 10 cents a gallon in hidden bank fees every time they gas up, a new study by the National Association of Convenience Stores (NACS) has found. "Your bank has its hands in your pocket at the gas pump, and you don't even know it," the industry trade group is telling consumers.

The banks' interchange or "swipe" fee goes up with the price of gasoline, even though the bank is doing nothing extra to process the consumer's debit-card or credit-card transaction.

All kinds of card fees, including swipe fees, are set in secret by Visa and MasterCard, said NACS. They have grown to be the owner's largest operating expense after labor--more than rent, more than utilities. C-stores paid more than $11 billion in card fees last year, a jump of almost 25% and an amount almost 90% greater than their profits.

"These fees have come to be a tremendous burden on convenience stories, most of which are run by small business people," said Lyle Beckwith, senior vice president of government relations for NACS. "In many cases, the banks are profiting more from the sale of gas than our members."

As gasoline goes to $4 in some markets, the bank's average cut of swipe fees alone increases to seven cents, if the motorist pays with a debit card and up to 10 cents with a credit card.

The consumer pays the extra money even if he or she pays cash, because the credit card companies' rules push the merchant to pass along the costs to everyone, NACS said, not just customers who pay with plastic.

The study also found that gasoline prices increased 80% between 2004 and 2011. Card fees rose 180%. In other words, even when gasoline prices level off, the bank fees continue to rise.

Because credit-card fees are fixed in secret by a duopoly of MasterCard and Visa, they always are on the increase, to the point where they are now the highest in the industrialized world, NACS said.

For a copy of the report, "Hidden Bank Fees Siphon Money from Customers & Merchants at the Pump," click here.

NACS is a member of the Merchants Payments Coalition (MPC), a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, online merchants and other businesses that 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.