The National Grocers Association (NGA) is urging federal regulators to withdraw a banking rule it says could increase costs for independent grocers and consumers by reinforcing the market dynamics behind rising credit card interchange fees, or “swipe fees.”
In comments submitted to the Office of the Comptroller of the Currency (OCC), NGA opposed an interim final rule addressing how national banks may establish interchange fees in connection with the Illinois Interchange Fee Prohibition Act.
According to NGA, the rule marks a significant shift from longstanding banking policy by allowing national banks to receive interchange fees established through third-party arrangements rather than through direct competition among banks.
“NGA strongly opposes the OCC’s interim final rule, which permits national banks to establish interchange fees through third-party arrangements,” NGA President and CEO Greg Ferrara said in a statement. “This approach undermines competition and increases costs for independent community grocers and the customers they serve.”
The debate centers on interchange fees — often referred to by retailers as swipe fees — that merchants pay every time a customer uses a credit or debit card. For grocers operating on thin margins, those fees represent one of the largest operating expenses outside of labor and occupancy costs.
NGA argues the OCC’s action could weaken competitive pressures that have historically influenced fee-setting and ultimately contribute to higher costs throughout the payment system.
Because card payments now account for a substantial share of grocery transactions, even small increases in interchange expenses can have significant implications for retailers, particularly independent operators that lack the scale of larger chains.
The association also pointed to ongoing congressional efforts to increase competition in the payments marketplace, including the Credit Card Competition Act, arguing that the OCC’s decision moves in the opposite direction.
NGA is urging regulators to withdraw the rule and maintain what it describes as the longstanding principle that interchange fee-setting authority should remain grounded in competition among banks.
The bottom line: Swipe fees remain one of the most contentious cost issues facing food retailers. As payment costs continue to rise, grocery operators are increasingly viewing interchange reform as a margin issue rather than simply a banking issue.
