By sean

This summer and autumn, interchange fees and rising gas prices have drawn some attention.  The majority of people pay for gas with a credit or debit card now and gas usually has pretty low margins for the retailer.  The economics of gas station operators have been severely impacted by this combination.

The National Association of Convenience Stores (NACS) estimates that the 146,000 convenience stores in the U.S. paid a combined $7.6B in credit card fees, or $52,064 per store, in 2007.  In contrast, those same 146,00 stores only generated $3.4B in profits (net income), or about $23,287 per store.  Credit card fees are the 2nd-largest operating expense for convenience stores, behind only labor (i.e. more than rent, utilities, etc.).

Based on the NACS estimate that in 2007 the average gas station / convenience store collected $3.955M in revenue meaning that 1.32% of total revenue was paid in credit card fees.  The 2008 Hitachi Consulting Study of Consumer Payment Preferences (P.6) found that 56% of purchases at gas stations and convenience stores were made with a credit card or debit card.  Therefore, we can confidently estimate that the average credit card processing rate paid by convenience stores and gas stations is (1.32 / 0.56) = 2.36%.

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