Bipartisan duo urges Visa, Mastercard to call off swipe fee boost on August 31, 2023 at 9:25 pm Business News | The Hill

Senate Majority Whip Dick Durbin (D-Ill.) and Sen. Roger Marshall (R-Kan.) are urging Visa and Mastercard to call off their plans to increase credit card swipe fees, arguing that the move would hurt small businesses and consumers.

Swipe fees — or the fees that credit card companies charge retailers for credit card transactions — are estimated to have cost U.S. merchants $93 billion last year and are often passed on to consumers, the senators noted in a joint statement.

“With small businesses and families already dealing with high prices on groceries and gasoline, this hidden credit card fee increase couldn’t come at a worse time,” Durbin and Marshall said.

Visa and Mastercard are set to increase their swipe fees in October and April, in a move that could potentially cost retailers an additional $502 million annually, the Wall Street Journal reported on Wednesday. 

Durbin and Marshall, who reintroduced legislation targeting swipe fees last month, said news of the fee increases “solidifies that it is time to pass our bipartisan, bicameral legislation,” which they argue would increase competition and lower costs for businesses and consumers.

The Credit Card Competition Act would require financial institutions with more than $100 billion in assets to enable at least two network options for processing credit card transactions, one of which is neither Visa nor Mastercard. 

The two companies control 80 percent of the credit card network market in America.

“We need to bring real competition to the credit card industry,” Durbin and Marshall said in Wednesday’s statement. “Our bill ensures that the Visa-Mastercard duopoly ends their price gouging tactics that disproportionately hurt American families and small businesses.” 

However, the Electronic Payments Coalition — which includes Visa, Mastercard and other banking giants — has argued that such legislation stands to benefit “big-box retailers” and would eliminate funding for popular credit card “points” programs.

“Big-box retailers, led by Walmart and Target, and their allies in Congress continue to distort the truth about interchange,” Richard Hunt, the executive chairman of the Electronic Payments Coalition, said in a statement on Thursday.

Hunt noted that swipe fees have largely remained stable in recent years while retail sales have increased. He also pointed to the failures of large-scale retailers to pass on savings from previous legislation that targeted similar fees on debit card transactions.

“Lawmakers should not fall for the broken promises made by merchants,” Hunt added.

​Business, News, Technology, credit card companies, Credit Card Competition Act, mastercard, swipe fees, visa Senate Majority Whip Dick Durbin (D-Ill.) and Sen. Roger Marshall (R-Kan.) are urging Visa and Mastercard to call off their plans to increase credit card swipe fees, arguing that the move would hurt small businesses and consumers. Swipe fees — or the fees that credit card companies charge retailers for credit card transactions — are…