JPMorgan to Add Competing Network to Cards in France Despite Banks’ Opposition to Same in U.S.

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

WASHINGTON, March 8, 2024 – JPMorgan Chase’s move to add a competing processing network to Visa and Mastercard credit cards it issues in France shows that the banking industry’s objections to the Credit Card Competition Act “are complete fabrications,” the Merchants Payments Coalition said today.

“JPMorgan and its giant banking friends in the U.S. say that offering a network alternative in America will make the sky fall, end rewards, hurt security, and cause the sun to implode and turn into a black hole,” MPC said. “Is it really true … that they actually know everything they are saying here is a fabrication, and they have no problem adding network competitors overseas?”

The comments came in
an email sent to Capitol Hill offices citing JPMorgan’s announcement on Monday that it has joined Cartes Bancaires CB, France’s leading payment network, with the goal to “provide competitive transaction costs” to merchants in France. Cartes Bancaires offers merchants lower swipe fees for processing transactions than those set by Visa and Mastercard and the option to route transactions over its network will give them “a domestic alternative to rival services provided by Visa and Mastercard,” according to Reuters.

There you have it,” the MPC email said.The banks’ complaints about the Credit Card Competition Act and adding a second network so there can be price competition in America are complete fabrications.”

The announcement comes as Senator Richard Durbin, D-Ill., one of the lead sponsors of the CCCA, plans to
hold a hearing on lack of swipe fee competition in the Senate Judiciary Committee next month.

Visa and Mastercard – which control over 80 percent of the market – each centrally set the swipe fees charged by banks that issue cards under their brands, and also block transactions from being processed over other networks that could do the job with lower fees and better security. Without competition, credit and debit card swipe fees have more than doubled over the past decade and hit a record $160.7 billion in 2022. Swipe fees are most merchants’ highest operating cost after labor and drive up consumer prices by over $1,000 a year for the average family.

Under the legislation, banks with at least $100 billion in assets would be required to enable cards they issue to be processed over at least two unaffiliated networks – Visa or Mastercard plus a competitor. The requirement is expected to create competition over fees, security and service that would save merchants and their customers
over $15 billion a year.

The card industry has claimed that the CCCA would lead to the end of credit card rewards and undermine transaction security. But the MPC email cited studies by the website and others showing rewards would not be affected and data from the Federal Reserve showing that competing networks like NYCE, Star and Shazam have one-eighth the fraud rate of Visa and Mastercard’s networks.

Discover, which is in the process of being acquired by Capital One, has also been cited as a potential second network. Nonetheless, Visa and Mastercard’s prohibition on other networks processing transactions on their cards in the United State would keep any second network from being added here
unless the CCCA is passed. The prohibition does not apply in Europe.

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.