Francis Scialabba
All right, let’s do this one last time.
Congress has reintroduced legislation that could lower fees merchants pay when customers swipe their credit cards. Sen. Dick Durbin (D-IL) and Sen. Roger Marshall (R-Ks) introduced the bill, the Credit Card Competition Act, last year, but it ultimately died in committee.
- The newly proposed legislation has additional bipartisan support from cosponsors Sen. J.D. Vance (R-OH) and Sen. Peter Welch (D-VT).
If the bill passes and is signed into law, merchants would have the option of routing credit card payments through an unaffiliated network, as opposed to having to go through Visa or Mastercard’s networks.
- The National Retail Federation (NRF) said this change “could save consumers and merchants $11 billion annually.”
“Currently, retailers are burdened with exorbitant and non-negotiable ‘swipe’ fees imposed by Visa and Mastercard, which control 80% of the market,” NRF said in a statement. “These fees hinder growth and make it challenging for retailers to invest in their future.”
Last Wednesday, a version of the bill was introduced in the House with additional support from Republicans. As with the Senate bill, last year’s bill wasn’t voted on in the House after it was sent to committee.
Zoom out: “Big banks and networks and their trade groups have lobbied against the bill. They say it would likely result in credit-card rewards programs, which are heavily funded by interchange fees, getting scaled back,” the WSJ reported. And like they were last year, credit unions are vehemently opposed, claiming the legislation is a “massive financial windfall for big box retailers at the expense of consumer access to safe, affordable credit,” Credit Union National Association CEO Jim Nussle said in a statement.
“Big box bullies are pushing for financial breaks that would risk both the data security and access to credit for consumers and small business owners. This bill would allow these large merchants to use the cheapest credit card processing option, with no requirement to keep consumers’ data safe or return savings back to them,” Nussle added.
“Merchants like Target and Walmart reap the benefits of credit card usage with immediate payments, protection from fraud, and typically larger purchases by consumers—but don’t want to pay the cost of accepting credit cards.”
The Electronic Payments Coalition, which represents credit unions as well as banks and payment networks, says the bill, as currently written, hurts consumers by weakening transaction security and decreasing access to credit and rewards programs.
Stay up to date on the retail industry
All the news and insights retail pros need to know, all in one newsletter. Join over 180,000 retail professionals by subscribing today. Check out the latest issue here.
If you are not yet a BRA Retail Member, you can easily opt in to either Regular (no cost) or Distinguished ($100/yr.) Membership via this super simple join form