Credit Card Competition Act Would Now Save Merchants and Consumers Over $16 Billion a Year

Contact: J. Craig Shearman
(202) 257-3678

WASHINGTON, April 30, 2024 – With the Credit Card Competition Act now projected to save merchants and consumers over $16 billion a year, passage is needed more than ever, the Merchants Payments Coalition said today.

“Total swipe fees have jumped above $170 billion per year and cost the average family more than $1,100,” MPC Executive Committee member and National Grocers Association Senior Vice President of Government Relations and Counsel Christopher Jones said. “Given those exploding numbers, the Credit Card Competition Act would save people an estimated $16 billion per year. Small businesses and their customers desperately need a competitive market system and the savings that would come from this legislation. It’s a modest hit to card industry revenues but very significant to those who ultimately pay these fees.”

In a new report, payments consulting firm CMSPI estimates that passage of the CCCA would “conservatively” save $16.4 billion a year, based on data from the Nilson Report showing credit and debit card swipe fees grew to a record $172.05 billion in 2023. That’s up from last year’s estimate of $15 billion based on 2022 swipe fees and an original $11 billion estimate based on pre-pandemic 2019 data.

“Increased competition for credit card network routing – as required by the reintroduced Credit Card Competition Act – would result in significant pro-competitive efficiencies for U.S. payment services, which have some of the least competitive rates across the globe,” CMSPI said.

CMSPI also broke out CCCA savings by state, with some of the largest expected to have the biggest benefit. Of the top five, California would save $2.3 billion, Texas $1.5 billion, New York $1.3 billion, Florida $950.2 million and Illinois $651.5 million.

The numbers come as the cost to consumers has also risen as swipe fees drive up prices. Last year’s swipe fees came to a record $1,102 for the average household, up from $1,024 in 2022, according to MPC estimates. Swipe fees amounted to $897 for the average household in 2021 and $724 in 2020. The average credit card swipe fee rate reached a record 2.26 percent last year, up from 2.02 percent in 2010.

Visa and Mastercard, which control over 80 percent of the market, each centrally set the swipe fee rates charged by all banks that issue credit cards under their brands rather than allowing banks to compete to offer the lowest rates. They also block transactions from being processed over competing networks that offer lower fees and better security.

The CCCA would ensure that cards from the nation’s largest banks be able to be routed over at least one competing network like NYCE, Star, Shazam or Discover in addition to Visa or Mastercard’s networks. Banks would choose which networks to enable but merchants would then choose which to use, meaning networks would have to compete over fees, security and service. Financial institutions with less than $100 billion in assets – including all community banks and all but one credit union – would be exempt.

About MPC
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.