NACS Advocacy

2022 Advocacy: Cards and Cars

NACS Annual Reports > AR2022 > Advocacy: Cards and Cars

Two issues rose to the top our legislative and regulatory agenda: credit card swipe fees and electric vehicle charging infrastructure.

Although different issues, one word aptly describes why NACS and our convenience retail community are invested in the outcomes: competition.

The Swipe Fees Fight

The shift from Americans using cash to credit and debit cards accelerated during and after the COVID-19 pandemic. This change in consumer behavior is significant for our industry and here’s why:

After a decline in 2020, card fees increased significantly to $13.5 billion in 2021, an increase of 26.2%. Additionally, more than three-quarters (75.4%) of all transactions were paid with a card within our channel, resulting in a worst-case trifecta for unsustainable gains in card fees—also known as swipe fees. (Source: NACS State of the Industry Report® of 2021 Data)

For many convenience retailers, the swipe fees they pay exceed their pretax profits—the industry’s pretax profit in 2021 was 2.47%, and the average credit card fee is 2.25%. These fees represent their second-highest operating cost, which is less than labor but more than rent and utilities.

Combined, Visa and Mastercard control about 80% of the credit card volume in the United States. Visa and Mastercard set the prices and terms for the thousands of banks that issue their cards, even though the swipe fees go to the card-issuing bank.

NACS believes that banks should compete on their swipe fee prices—and because they don’t—swipe fees increase year after year and U.S. retailers and consumers pay more in these fees than the rest of the world—more than seven times what merchants pay in Europe and five times more in China.

The market is clearly broken. Congress passed debit reform in 2010, which has successfully helped retailers curtail debit swipe fees. Last year, retailers won a battle over debit routing rights with the Federal Reserve finalizing a rule requiring banks honor two routing options for online and in-app debit transactions.

With credit card fees skyrocketing, our industry went on the legislative offense and got bipartisan legislation, the Credit Card Competition Act, introduced in both the U.S. Senate and House of Representatives. The legislation would bring long-needed competition to credit cards by requiring two unaffiliated routing networks on the cards, meaning Visa and Mastercard would have to compete with another network for this service, just like what happens on debit cards today

“Once I figured out that there were four global banks and two credit card companies controlling this industry, I said, there’s a problem in here,” said U.S. Sen. Roger Marshall (R-KS), a co-sponsor of the Senate bill along with longtime swipe fee reform advocate Sen. Richard Durbin (D-IL). “And then once we started having this horrible inflation, I think that’s when it came to my attention that this is an inflation multiplier,” Marshall said.

Our industry thrives on competition, which is why we believe that competition in this market would lower the cost of credit card transactions and foster an environment for innovation and security.

More than 6,200 NACS member emails have reached members of Congress asking them to support the Credit Card Competition Act.

Once I figured out that there were four global banks and two credit card companies controlling this industry, I said, there’s a problem in here.

U.S. Sen. Roger Marshall (R-KS), a co-sponsor of the Senate bill along with longtime swipe fee reform advocate Sen. Richard Durbin (D-IL)

Convenience Matters

Our weekly podcast, Convenience Matters, delved into swipe fees and electrification. ICYMI, here’s where you can find these conversations:

Competition for the Credit Card Market
The Credit Card Competition Act would bring long-overdue competition to the credit card marketplace, significantly reducing swipe fees. Here’s what you need to know—and do—to help move this effort forward.
A Deep Dive Into Effective EV Infrastructure Expansion
With billions of dollars being invested in electric vehicle charging infrastructure, what will the demand for EV chargers look like during the next 10 years?
Is an Electric Vehicle Future Possible?
There are many optimistic projections about EVs becoming a significant part of our transportation future, but very few account for current roadblocks.
Where Do EVs Make the Most Sense?
Not all emissions are equal. A new Fuels Institute study explores how energy can determine where EVs and hybrids reduce emissions. Hint: It varies considerably by region.

A Competitive EV Charging Market

NACS supports an open and competitive electric vehicle charging market with a level playing field. While some retail markets may not see an immediate future in EV charging, laying the groundwork today will ensure that retailers can meet the energy needs of the future.

With more than 116,000 fueling locations throughout the United States, the convenience retail industry is well-positioned to provide the fuel and energy their customers demand, regardless of the energy source.

Allowing the private sector to compete is the best way to spur investment and develop electric vehicle charging infrastructure, and all industries should have fair access to incentive and investment opportunities that provide choice for their customers’ refueling needs.

In February 2022, the Biden Administration released an EV charging infrastructure plan to install 500,000 EV chargers. The National Electric Vehicle Infrastructure (NEVI) Formula grant program, which is based on the president’s plan and included in the bipartisan infrastructure bill, requires states to install an EV charger every 50 miles and be located no more than one mile off high-use corridors, mostly interstates.

NACS, along with industry associations NATSO and SIGMA, urged the U.S. Department of Transportation to incentivize the nation’s existing refueling locations to incorporate EV charging into their suite of fueling options as the federal government implements the NEVI grant program.

The chargers must have at least 600 kilowatts of total capacity, with ports for at least four cars that can simultaneously deliver at least 150 kilowatts each. The chargers also need to be accessible to the public or to fleet operators from more than one company.

If federal investments are made without any effort to drive necessary policy and market reforms, or with unnecessary strings attached, the NEVI grant program will result in charging stations being placed in undesirable locations, limiting consumer interest in purchasing EVs and minimizing private companies’ desire to invest in charging stations.

“Bringing private investment to EV charging will lead to more of the infrastructure that drivers need,” said NACS General Counsel Doug Kantor. “To do that, the NEVI program should move the country toward a competitive EV charging market with a multitude of retail businesses in all parts of the country having the opportunity to invest and earn a profit. Encouraging private investment will mean state-of-the-art chargers in convenient locations with competitive low prices alongside the types of amenities that drivers have come to expect while they refuel,” he said.

EV Charging Infrastructure Resources

Convenience stores are destinations for millions of drivers who rely on their local store to refuel and, in some instances, recharge. As more EVs enter the market, retailers are exploring how to build a charging infrastructure and capitalize on opportunities that are right for their business.

NACS EV resources can help our retail community prepare for EVs, host/own Electric Vehicle Supply Equipment (EVSE) and prepare for future changes.

The NACS EV Charging Calculator helps retailers assess the cost and profitability of offering EV chargers at their sites. The calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs after allowing for potential ancillary in-store visits and purchase profitability.

The NACS Electric Vehicle Infrastructure Program brings together our retail community and organizations that support EVSE installation at c-stores. These organizations range from those that are looking for opportunities to install and operate their own equipment at NACS member locations, to those that can finance the installation or provide technical assistance.

2022 NACS Advocacy Achievements

NACS works to protect the best interests of the convenience and fuel retailing industry before Congress and federal agencies—especially against rules and regulations that can have a negative impact on your business. 

Retailer engagement in the legislative process is essential to the long-term success of your business. Here’s how your engagement helped our industry maintain an influential voice in Washington in 2022:

  • Stopped legislative proposals and language from being included in the FY 2023 Omnibus Appropriations bill that would have been disadvantageous to the convenience industry, such as removing renewable diesel labeling requirements and data privacy proposals that would have unfairly placed added burdens on your business.
  • Secured agency waivers to help with fuel supply, such as a temporary waiver to allow for sale of E15 during the summer, and waivers from hours-of-service requirements to help with transport.
  • Secured bipartisan support for the introduction of the Credit Card Competition Act in both the House and the Senate.
  • Secured bipartisan cosponsors for legislation that would allow the sale of hot foods to Supplemental Nutrition Assistance Program (SNAP) participants.
  • Testified before multiple House and Senate Committees, including the Senate Judiciary Committee on swipe fees, the House Agriculture Committee on EVs, and twice before the House Energy and Commerce Committee on data privacy legislation and daylight savings legislation.
  • Stopped efforts to expedite onerous fire code requirements for EV chargers at gas stations.
  • Received a favorable final rulemaking from the Federal Reserve that clarified that banks must enable two network routing options on all cards not present, mobile and in-app debit transactions.
  • Successfully urged the Federal Trade Commission to bring enforcement action against Mastercard for blocking debit routing competitors.

Make your voice heard.

NACS offers many ways to get involved in advocacy for our industry.