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Florida is among the states hardest hit by inflation across the U.S., falling only behind neighboring Louisiana, according to a recent Merchant Maverick report. South Florida has been particularly impacted, with consumer prices increasing 9.6 percent over the last year, climbing well above the latest national consumer inflation rate of 8.6 percent.
High energy and housing costs have overwhelmingly led to the region’s record inflation rates, with gas prices soaring almost 20 percent higher than they were a year ago, according to the U.S. Bureau of Labor and Statistics. Energy costs as a whole, meanwhile, rose an eye-popping 41.5 percent.
Now consumers are seeing this trickle down into their everyday routines. South Florida restaurants recently shocked diners with a “temporary inflation fee” tacked on to help them offset the rising costs of food, a competitive labor market, takeout packaging, and other overhead expenses.
Florida’s government is already trying to help stimy inflation’s impact by issuing $450 stimulus checks to thousands of households in need throughout the state. However, there is another driver of increasing costs to Americans that Congress should immediately address: credit card swipe fees.
Charged every time you swipe, tap, or insert a credit card, swipe fees add an extra 1.5 to 3.5 percent to every payment transaction. These fees are based on a percentage of the total transaction, meaning businesses are paying more than ever before in swipe fee costs amid record high inflation.
Small businesses like your neighborhood grocery stores and gas stations, which already operate on slim profit margins, are particularly hard hit by these costs which regularly rank as their second-highest expense following the cost of labor. This often means that small business owners are forced to pass these swipe fee costs onto consumers in order to keep their doors open.
Unfortunately, Visa and Mastercard together make up 80 percent of the credit card market, meaning they have near total control over swipe fee rates and can raise them at will. Banks that issue their cards then accept whatever rate Visa and Mastercard impose because they too, benefit from the high fees.
Fortunately, Congress has stepped up to address the lack of competition within the credit card marketplace through the proposal of the Credit Card Competition Act. Introduced by Senator Roger Marshall, this bipartisan piece of legislation would require card issuers to provide at least one other routing option for credit card companies to use when processing transactions; fostering a fair and competitive, payments marketplace.
Republican Congressman Carlos Gimenez, who represents a large swath of south Florida, has been among the most vocal supporters of finding solutions to rising inflation. He should lead the way on reducing swipe fee costs in the U.S. House by supporting the Credit Card Competition Act. South Floridians are among the worst off in the country in terms of negative inflationary impacts and Rep. Gimenez, along with Senators Rick Scott and Marco Rubio, could bring lasting relief to his constituents by working with his colleagues to encourage competition in the payments marketplace.
