The Golden Globes Are a Golden Opportunity – For Big Banks
WASHINGTON--(BUSINESS WIRE)--The following press release was issued by Merchants Payments Coalition:
Movie ticket sales rebounded in 2015, up 7 percent to $11 billion, according to the Box Office Mojo website. But it’s not the theaters raking in the biggest profit margins: It’s the banks.
Every time you swipe a debit or credit card to buy a ticket, your bank lops off a big chunk of the price for itself for processing the transaction. The banks inflate these “swipe fees” every year even as their costs drop. The profit margins are so high that few industries can match them: 500 percent for debit cards, according to the banks’ own figures, and as much as 10,000 percent for credit cards.
Say you buy tickets for a family of five at the average of around $8 each. Use a credit card to pay the $40, and as much as 4 percent -- $1.60 – goes directly to the bank that issued your credit card. That’s a big profit on a transaction that costs the bank only a few pennies.
And these swipe fees add hundreds of dollars every year to the cost of everything you buy, from gas to groceries – even if you don’t use a card. That, of course, hurts the poorest consumers the most.
At 4 percent, the banks could have made as much as $30 million on the top-grossing film of the year, Star Wars: The Force Awakens, which took in $750 million before the end of the year.
Even a relatively modest hit like Mad Max: Fury Road, nominated for a Golden Globe – the award ceremony is Sunday – represents a handsome profit for the banks. It took in $154 million (Number 20 in ticket sales last year), which at 4 percent would yield $6 million in swipe fees.
Two giant companies – Visa and MasterCard – dominate the swipe-fee market and price-fix fees without competition in order to lure banks to their brands. Swipe fees are merchants’ fastest-growing costs and are the second-largest operating cost for many, after only labor.
Bad for consumers, bad for merchants, bad for the economy – it’s time to make these fees more fair.
The Merchants Payments Coalition represents retailers, restaurants and other businesses fighting against unfair credit card fees and for a more competitive and transparent system fair for consumers and merchants alike.