Restaurants to Congress: Swipe left on rising fees

Restaurants are the cornerstone of the local, state and national economy in the U.S. With food service on pace to reach nearly $1 trillion in sales this year alone, the restaurant industry’s impact has never been more important. To put that in perspective, the total gross output in the restaurant industry is larger than the agriculture, airline, and lodging sectors combined.

Restaurants are also the land of opportunity for all people of all backgrounds, regardless of their education or financial situation. Our industry is proud to support a tide that lifts more than 15 million employees in every state from coast to coast.In fact, almost every county in America is home to at least three restaurants, and we need Congress to help pave the way for making it easier to hire employees and keep business costs low. To support this effort, the National Restaurant Association recently sent a letter to congressional leadership that included two solutions that will broaden the workforce, deliver new opportunities in the industry, and lower costs — the Essential Workers for Economic Advancement Act (EWEA) and the Credit Card Competition Act.

The worker shortage has strained our ability to serve our customers and support our communities. The EWEA program would expand America’s workforce by creating career paths that do not require a college degree through market-driven, non-immigrant, three-year visas. The program is tailor-made for the restaurant industry with its focus on filling non-agricultural jobs that have remained unfilled for an extended period of time. It is a strong, sensible solution to the workforce challenges facing America’s restaurants.

In addition to workforce challenges, the cost of doing business has risen dramatically in the last few years. In 2022 alone, there was a 20 percent increase in the swipe fees credit card companies charge restaurants to process payments. After food and labor costs, these fees represent the third-largest expenditure for restaurants, largely because just two giant credit card companies account for over 80 percent of all U.S. credit card transactions.

This lack of competition is only going to drive these fees higher in the future, placing unfair financial burdens on businesses across the country. Congress can provide much-needed competition in this area by passing the Credit Card Competition Act. This bill requires that credit cards issued by the nation’s largest banks be routed over at least two competing networks. Consumers wouldn’t see any change, but merchants could choose which networks to use. Also, with more competition and lower costs, operators would be able to pass down savings to consumers and reinvest a portion back into their business and workforce development programs. It’s clearly a win-win for businesses and customers with an estimated $11 billion in savings annually.

Restaurants bring limitless opportunities to the communities we serve, and we’re proud to be a driving force in the nation’s economy. We look forward to working with Congress to advance the Essential Workers for Economic Advancement Act and the Credit Card Competition Act.

Sean Kennedy is the Executive Vice President of Public Affairs for the National Restaurant Association.