Merchants Say Record JPMorgan Chase Profits Show Need to Pass Credit Card Competition Act

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

WASHINGTON, January 16, 2024 – Record annual profits reported last week by the nation’s largest credit card issuer are the latest evidence of the need to bring soaring credit card swipe fees under control, the Merchants Payments Coalition said today.

“Small merchants and their customers are struggling under higher swipe fees everyday while megabank profits continue to rise, and that’s not fair,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “Mammoth profits on Wall Street are being made on the backs of small businesses across the country and the consumers who pay higher prices as a result. Megabanks need to compete over swipe fees the same as small businesses compete every day.”

JPMorgan Chase reported Friday that 2023 profits totaled a record $49.6 billion, a 32 percent year-over-year increase that gave the nation’s largest bank the most profitable year in its history. JPMorgan is also the largest U.S. issuer of credit cards, accounting for nearly one-quarter of all Visa-Mastercard cards issued and twice as many cards as No. 2 issuer Citigroup. Debit and credit card sales volume was up 7 percent.

Also on Friday, Citigroup reported full-year net income of $9.2 billion while two other large card issuers, Wells Fargo and Bank of America, reported $19.1 billion and $26.5 billion, respectively.

High swipe fees contribute to enormous profits for the card industry. Visa had quarterly profits of 55 percent and Mastercard had 49 percent as of October while money center banks that issue the majority of credit cards average 31 percent. By contrast, the average net profit for general retail is only 3 percent.

The earnings report comes as sponsors of the Credit Card Competition Act are seeking to have the Senate take a vote on the legislation. Nearly 300 merchant trade associations and close to 2,000 companies, including hundreds of small businesses, wrote to Congress last week seeking support of the measure.

Swipe fees are up 50 percent since the pandemic and hit a record $160.7 billion last year, costing the average family over $1,000 a year. Visa and Mastercard each centrally set the swipe fee rates charged by all banks that issue credit cards under their brands and also block transactions from being processed over competing networks that offer lower fees and better security.

The bill would require that cards from the nation’s largest banks be able to be routed over at least one competing network like NYCE, Star or Shazam 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, saving merchants and their customers an estimated $15 billion a year. Financial institutions with less than $100 billion in assets – including all community banks and all but one credit union – 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.