Author: Craig Shearman

FOR IMMEDIATE RELEASE
Contact: Maddie Carlos 202-224-7115
J. Craig Shearman, 202-257-3678 craig@shearmancommunications.com for MPC

Senators were joined at a press conference today by the Merchants Payments Coalition and small business owners from across the country who endorse their bill

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, and U.S. Senators Roger Marshall, M.D. (R-KS) and Peter Welch (D-VT), along with the Merchants Payments Coalition and small business owners from across the country, held a press conference calling on Congress to pass their Credit Card Competition Act, bipartisan legislation that would enhance competition and choice in the credit card network market, which is currently dominated by the Visa-Mastercard duopoly.

“American consumers today are concerned about inflation and the high prices of groceries and gas.  What they may not know is that the fees charged by Visa and Mastercard when they use their credit card, known as swipe fees, are adding to this problem,” said Durbin.  “Merchants have no choice but to accept the outrageous fees if they want to accept credit cards used by their customers.  Our bipartisan legislation, which has the support from a wide range of small business owners, would inject real competition in the credit card market.  It is long overdue for Congress to break up the sweetheart deal that Visa, Mastercard, and the big banks enjoy.  We must bring the bipartisan Credit Card Competition Act to the floor for a vote.”

“Family’s budgets are being stretched to the absolute limit with little room for error while Wall Street and the Visa-Mastercard duopoly line their pockets. But apparently, Visa-Mastercard’s 50% profit margin is not enough. They are plotting their next payday, announcing they are hiking up their credit card swipe fees on merchants and consumers again this fall. I won’t stand for these massive, wealthy corporations price-gouging small businesses at every turn. Visa and Mastercard’s duopolistic, heavy-handed market practices have disproportionately hurt American families and small businesses for far too long. The credit card market is broken, and we have a solution to fix it. We must pass our bipartisan Credit Card Competition Act,” said Marshall.

“So many of us here in Washington celebrate the American dream of owning a small business, but the truth is it’s far too difficult to make that dream a reality. The brutal exchange fees imposed by credit cards are absolutely abusing Vermont’s merchants,” said Welch. “It’s hard enough to be a small business today, especially as they compete against online retailers and big box stores—now, the growing swipe fees on every transaction are making it harder.  The Visa-Mastercard duopoly’s plan to raise interchange fees is just the latest reason to pass the bipartisan Credit Card Competition Act, so we can make it easier for our small businesses to thrive.”

“Thank you to Senators Durbin, Marshall, Welch and Vance for their tireless advocacy on behalf of Main Street businesses.  We need Congress to follow the lead of these champions of Main Street.  With Visa and Mastercard hiking fees and creating new ones just next month, it’s time to pass the Credit Card Competition Act,” said Doug Kantor, Merchants Payments Coalition Executive Committee member and National Association of Convenience Stores General Counsel.

“Visa and Mastercard make sure that small businesses like mine get hit with the highest credit card swipe fees.  They should not be able to get away with centrally fixing those fees, but they do.  We need the Credit Card Competition Act to finally bring some market forces to bear for small businesses.  Without it, the situation will just keep getting worse,” said Jared Scheeler, CEO of the Hub Convenience Stores Inc. in Dickinson, N.D.

“Credit card swipe fees are not the result of a competitive market and our fees increased more than 28 percent last year alone.  This problem will never fix itself. We need Congress to act to protect Main Street from these unfair fees,” said Doug Yawberry, President of Weigels Inc. convenience stores in Powell, Tenn.

“Local grocers need help. The bipartisan Credit Card Competition Act does that.  There is no heavy-handed government price controls.  This is a commonsense solution that requires the smallest of competition in credit card market.  The grocery industry is heavily competitive. We compete every day on prices and products. Competition works and it is desperately needed in the credit card market,” said Jimmy Holland, Associated Wholesale Grocers in Kansas City, Kan.

“As a small business owner, I feel the burden of these fees especially hard.  That’s because small businesses pay the highest swipe fee rates, have the fewest resources to navigate complex credit card contracts and have no leverage whatsoever to negotiate. The answer is competition, and that’s why I support Credit Card Competition Act,” said Patti Riordan, owner of the Smoke Stack Hobby Shop in Lancaster, Ohio.

“In my 28 years in the retail business, credit card companies and the banks continuously raise what I pay in swipe fees. For my store, the amount we pay each year has grown to the equivalent of a starting employee’s salary.  I would love to hire more employees but these skyrocketing fees on top of challenging economic conditions are making it impossible to create jobs for my community.  It’s time to stand up for Main Street over Wall Street and pass the Credit Card Competition Act,” said Danny Reynolds, owner of Stephenson’s of Elkhart, a clothing store in Elkhart, Ind.

Last week, the Senators sent a letter to Visa and Mastercard insisting on an immediate reversal of their recent plans to increase credit card swipe fees on merchants and consumers again this fall—a move that would cost American businesses and merchants an additional $502 million annually.  In the letter, the Senators renewed their calls for competition in the payment processing industry and slammed Visa and Mastercard for their price-gouging tactics at the expense of hard-working Americans. 

Along with Durbin, Marshall, and Welch, U.S Senator J.D. Vance (R-OH) also co-introduced the bipartisan bill.  Building off of debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that the largest credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.

Visa and Mastercard wield enormous market power in credit cards; according to the Federal Reserve, they account for nearly 576 million cards, or about 83 percent of general-purpose credit cards.  Visa’s and Mastercard’s market power and network structure have enabled them to impose fees on U.S. merchants that are among the world’s highest, charging a total of $93 billion in U.S. merchant credit card fees in 2022.   These fees include interchange or swipe fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them.  Consumers ultimately pay for all of these fees in the price of the goods and services they buy.  Interchange fees are the second largest cost for many small businesses—only behind labor costs.

FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 craig@shearmancommunications.com

WASHINGTON – Nearly two-thirds of likely voters support credit card swipe fee reform, according to a new survey released today by the Merchants Payments Coalition.

“These numbers show that bringing competition to out-of-control swipe fees is a priority for consumers, not just merchants,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “Consumers are increasingly aware that swipe fees drive up the prices of everything they buy and are going nowhere but up. They want Congress to stand up against global credit card networks and Wall Street banks and put American families first. Regardless of political affiliation or age, consumers want lawmakers to pass the Credit Card Competition Act.”

The survey of nearly 1,000 U.S. adults was conducted by Pierpont Consulting & Analytics LLC September 5-11 and found that 65 percent of those interviewed support swipe fee reform. Decisive support was seen across party lines, including 69 percent of Democrats, 66 percent of independents and 60 percent of Republicans, along with 67 percent of those 35 and older and 56 percent of those who are younger. Only 27 percent of likely voters oppose reform.

All respondents to the survey had to have at least one credit card and be either “very likely” or “absolutely certain” to vote in the 2024 election for president and other offices. The survey has a margin of error of plus or minus 3.1 percentage points.

MPC released the survey results during a virtual news conference held this afternoon by the American Economic Liberties Project, Americans for Financial Reform, the Institute for Self-Reliance, Small Business Rising and other consumer and small business groups. The event was held to call on Congress to pass the Credit Card Competition Act, and included several of the 15 organizations that sent a letter to Capitol Hill last week endorsing the measure.

The MPC survey follows research released on Friday by the National Retail Federation, a member of the MPC Executive Committee, that found 81 percent of consumers support federal legislation that would allow for greater competition to lower credit card swipe fees for small businesses. NRF also found 73 percent of consumers trust small businesses over large banks when advocating for policies that impact consumers.

Both sets of research come as lead Senate sponsors of the Credit Card Competition Act are seeking to have the bill attached to the “minibus” spending plan that could be voted on by the Senate this week. Sponsors delivered remarks on the Senate floor last week, saying action is urgent because of Visa and Mastercard’s reported plans to increase credit card swipe fees by more than $500 million beginning next month.

First proposed last year, the Credit Card Competition Act was reintroduced in June by Senators Richard Durbin, D-Ill.; Roger Marshall, R-Kan.; Peter Welch, D-Vt., and J.D. Vance, R-Ohio, along with Representatives Lance Gooden, R-Texas; Zoe Lofgren, D-Calif.; Thomas Tiffany, R-Wis., and Jefferson Van Drew, R-N.J.

The bill is aimed at credit card swipe fees, which average 2.24 percent of the transaction but can range as high as 4 percent. Swipe fees have more than doubled over the past decade and rose $22 billion last year to a record $160.7 billion when debit cards are included. They are most merchants’ highest operating cost after labor, driving up prices by an estimated $1,024 a year for the average family.

Visa and Mastercard – which control over 80 percent of the market – each centrally set swipe fees charged by banks that issue cards under their brands, and also restrict processing to their own networks. The legislation would require banks with at least $100 billion in assets to enable cards to be processed over at least two unaffiliated networks – Visa or Mastercard plus well-established, high-security competitors like NYCE, Star or Shazam. That would make networks compete over fees, security and service and is expected to save merchants and their customers $15 billion a year.

In addition to lower fees, the Federal Reserve says the competing networks have one-fifth the fraud of Visa and Mastercard’s networks. Credit card rewards would not be affected, nothing would change about which cards consumers use or how they use them, and community banks and small credit unions would be exempt.

About MPC
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants. Follow MPC on Twitter, Facebook or LinkedIn for the latest on swipe fees.

FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 craig@shearmancommunications.com

WASHINGTON – The Merchants Payments Coalition welcomed remarks on the Senate floor today by sponsors of the Credit Card Competition Act addressing Visa and Mastercard’s reported plans to increase credit card swipe fees by more than $500 million beginning next month.

“Despite the nearly $100 billion Visa and Mastercard took out of communities and small businesses across the country last year, guess what they’re going to do in October? They’re going to raise the interchange fee again,” Senator Richard Durbin, D-Ill., said. “While we’re trying to fight inflation from every angle that we can find to bring down the cost of groceries and gas, the credit card companies have decided it’s just the right time to have this take-it-or-leave-it fee increase. When credit card fees go up, it increases inflation and consumers pay it.”

Durbin was joined by Senators Roger Marshall, R-Kan., and Peter Welch, D-Vt., who – along with Senator J.D. Vance, R-Ohio – are the Senate sponsors of the Credit Card Competition Act. Their floor speeches came two weeks after the Wall Street Journal reported that Visa and Mastercard plan to increase swipe fees by $502 million a year beginning in October, citing data from payments consulting firm CMSPI. The speeches followed a joint statement issued August 30 by Marshall and Durbin calling on Visa and Mastercard to withdraw the increases.

“I rise today with a clear message to Wall Street: Enough is enough,” Marshall said. “At a time when Kansans are facing the highest inflation prices in 40 years, small businesses are fighting to keep their costs low while Wall Street plots their next payday, announcing they are doubling down and hiking up their fees on merchants and consumers yet again this fall. I’m not going to stand for the massive, wealthy corporations price-gouging small businesses at every turn.”

“In Kansas, we have a saying: Pigs get fat, hogs get slaughtered,” Marshall said. “Visa and Mastercard have gotten hoggish on the backs of hard-working families.”

Welch said Visa and Mastercard’s “massive pricing power” has allowed credit card swipe fees for the two networks to grow from $33 billion in 2012 to $93 billion last year.

“They’re doing what monopolies and duopolies do,” he said. “They abuse that pricing power, and they just stick it to our merchants.”

“They justify what they’re doing because it’s a convenience for the shopper,” Welch said. “It is a convenience for the shopper. It’s a convenience for the merchant. But how does that justify a rip-off?”

“Merchants have been calling for relief from rising swipe fees but Visa and Mastercard’s response is to increase these fees again,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “Consumers and small businesses in the United States are already paying far more in swipe fees than any country in the industrialized world and can’t afford to pay more. Visa and Mastercard apparently don’t care. We agree that enough is enough. It’s time to pass the Credit Card Competition Act so global card networks and Wall Street banks will have to compete the same as Main Street businesses do every day.”

First proposed last year, the Credit Card Competition Act was reintroduced in June by the four senators plus Representatives Lance Gooden, R-Texas; Zoe Lofgren, D-Calif.; Thomas Tiffany, R-Wis., and Jefferson Van Drew, R-N.J.

The bill is aimed at credit card swipe fees, which average 2.24 percent of the transaction but can range as high as 4 percent. Swipe fees have more than doubled over the past decade and rose $22 billion last year to a record $160.7 billion when debit cards are included. They are most merchants’ highest operating cost after labor, driving up prices by an estimated $1,024 a year for the average family.

Visa and Mastercard – which control over 80 percent of the market – each centrally set swipe fees charged by banks that issue cards under their brands, and also restrict processing to their own networks. The legislation would require banks with at least $100 billion in assets to enable cards to be processed over at least two unaffiliated networks – Visa or Mastercard plus well-established, high-security competitors like NYCE, Star or Shazam. That would make networks compete over fees, security and service and is expected to save merchants and their customers $15 billion a year.

In addition to lower fees, the Federal Reserve says the competing networks have one-fifth the fraud of Visa and Mastercard’s networks. Credit card rewards would not be affected, nothing would change about which cards consumers use or how they use them, and community banks and small credit unions would be exempt.

About MPC
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants. Follow MPC on Twitter, Facebook or LinkedIn for the latest on swipe fees.