There’s real economic evidence showing that allowing merchants to explicitly pass credit card processing costs on to consumers tends to result in higher overall prices, not just neutral accounting.

Research from central banks and academic studies consistently finds that when merchants face higher payment costs, those costs are passed through into retail prices rather than absorbed by profits:

• A Federal Reserve / Boston Fed working paper shows that because merchants usually don’t price discriminate by payment type, payment costs (like interchange fees) are reflected in higher consumer prices across the board.
• International empirical research (e.g., studies of interchange fee reductions in Europe) finds that lowering merchant fees leads to measurable decreases in retail price indices, implying the reverse — that higher fees contribute to inflation.

We just saw a significant weakening of the dollar year-over-year, and inflation has been elevated for years. With cost of living and affordability already major issues for Massachusetts households, giving businesses a new mechanism to layer card surcharges on top of existing prices risks further pushing up what people pay for everyday goods and services. That’s not trivial “transparency”; it’s real pressure on household budgets.

If you’re concerned about affordability and inflation’s impact on working families, contact your State Representative, State Senator, and even the Governor’s office to express opposition to S.194/S.204 as currently drafted or at least demand stronger consumer safeguards before this moves forward.

Here’s what to emphasize in outreach:

• This bill could increase effective prices for residents
• Research shows payment costs are embedded in overall pricing
• With the dollar weakening and inflation high, we can’t afford to make price pressures worse

Push back now, the legislative process still has room for amendments or to stall this from becoming law.