Blog November 21st 2023

Unwrapping Card Fees This Holiday Season

Card fees are reaching near-record highs this holiday season. Read here to see how much retailers will pay this holiday season.

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Christian Johnson

Senior Manager, Global Advocacy Manager

This year is poised to be an expensive holiday season for retailers, who have battled breakneck fee increases over the past three years. In particular, the increasing costs will be felt by retailers operating online, who’ve seen a variety of interchange and network fees introduced since 2021. In addition, as consumers shop more with credit cards during the holidays, retailers can expect to see further growth to their bottom line, as credit card fees in the U.S. are some of the highest around the globe.1

This holiday season, the National Retail Federation estimates that holiday spending may top $967 billion up approximately 3 to 4% from 2022.2 CMSPI estimates U.S. retailers will pay card acceptance fees3 of over $18.6 billion associated with this estimated holiday spend under $18 billion in 2022 (Figure 1). To put into perspective, the $18.6 billion in card fees represents enough money to pay the estimated 450k seasonal workers hired this year an annual wage of over $41,000.4

Figure 1. Growth of Card Fees and Consumer Spending During the Holidays 5

More Digital Spend – and Fees – This Holiday Season

Credit card fees in the U.S. are some of the highest around the globe and are estimated to represent over 75% of the total U.S. card fees paid6, and credit card spending has been observed to spike during the holiday period7. From 2022-2023, holiday card fees grew twice as fast as total holiday card spend.

Part of the increases in card fees can be attributed to the rising share of spending occurring in ecommerce channels. Based on the NRF estimates, the share of spending in ecommerce channels has risen nearly 7% from 2022-2023 to represent nearly 30% of spending this holiday season. With nearly one in three dollars estimated to be spent online this holiday season, retailers will be exposed to disproportionately higher costs as the typical cost of transacting online can be nearly 50% more expensive online than in-store (Figure 2).


Figure 2. Comparison of Published Interchange and Network Costs for Select Card Types on a $50 Transaction 8

The other part of this trend can be explained by increases to card fees, which CMSPI estimates will be impacting merchants to the tune of $500 million annually by year-end 2024. The hefty fee increases from earlier this year only serve to exacerbate an already $160 billion cost for U.S. retailers.9

Furthermore, to demonstrate the extent to which credit card costs are impacting U.S. retailers, if all holiday spending this year was performed on credit cards, retailers would be spending over $26 billion in card fees, nearly $8 billion more than the estimate based on the current payments mix.

Keeping Costs Down This Holiday Season

Given it’s the busiest shopping season for most, the holiday period tends to represent one of the biggest challenges and opportunities for retailers. With the anticipated influx of customers, the results of suboptimal arrangements will be amplified and could even worsen.

As the first holiday since the Fed’s CNP clarification took effect, more retailers than ever will have access to competing rails for CNP routing, a $3 billion savings opportunity CMSPI estimates. With the shift to online shopping during the holidays, cost savings measures are more important than ever given the significant cost differential between in-store and online shopping. Alongside the shift to online spending, the holiday season also tends to see a spike in Buy Now, Pay Later spending which has come to represent one of the highest cost payment methods in the U.S.10 and typically cannibalizes debit spending11, further inflating retailer costs during the holidays.

As more card fees are introduced, more spending occurs online, and more payment methods are used at checkout, the holiday season brings with it an increased level of complexity that can prevent some of the largest merchants from optimally utilizing cost-saving measures, such as CNP least-cost routing and fee audits. For these retailers, the holidays could result in millions in potential savings left unrealized.

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3 Includes digital wallet spending for pass-through and non-pass-through digital wallets

4 Ibid

5 NRF Holiday Forecasts and CMSPI Estimates and Analysis

6 Nilson Report


8 CMSPI Analysis of Published Interchange and Network Fee Tables




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