FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 craig@shearmancommunications.com
WASHINGTON, February 13, 2024 – The Merchants Payments Coalition today welcomed the announcement that Senate Judiciary Committee Chairman Richard Durbin, D-Ill., has invited the CEOs of Visa and Mastercard to testify at a hearing on the lack of competition in the credit card market.
“It’s time for the CEOs of Visa and Mastercard to answer for decades of their companies blocking competition over credit card swipe fees,” MPC Executive Committee member and National Retail Federation Chief Administrative Officer and General Counsel Stephanie Martz said. “There are many questions to be addressed, most of all how they can justify fixing banks’ prices and inflating prices over $1,000 a year for the average family when it costs only pennies to handle a transaction. Senators should also hear why the card industry has repeatedly made false claims about the Credit Card Competition Act rather than honestly debating the issues on its merits. We look forward to hearing their answers.”
Durbin, who is the sponsor of the Credit Card Competition Act along with Senators Roger Marshall, R-Kan.; Peter Welch, D-Vt., and J.D. Vance, R-Ohio, announced Monday that he will hold a hearing on April 9. He invited Visa CEO Ryan McInerney and Mastercard CEO Michael Miebach to testify, along with United Airlines CEO Scott Kirby and American Airlines CEO Robert Isom.
Durbin said Visa, Mastercard and their allies have spent millions of dollars on “false and misleading advertising claiming the bill would ‘ban’ credit card rewards.” United and American have both criticized the bill, and Durbin said they “have become credit card companies that fly planes.”
The hearing would be the 18th on swipe fees over the past 18 years. The most recent was held by Durbin in the Judiciary Committee in May 2022, just before the CCCA was first introduced.
Credit and debit card swipe fees – which have risen 50 percent since the pandemic and reached a record $160.7 billion in 2022 – are most merchants’ highest operating cost after labor. The fees are far too high to absorb, especially for small merchants, and drive up consumer prices by an estimated $1,024 a year for the average family.
Visa and Mastercard – which control 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. The legislation would require banks with at least $100 billion in assets to enable cards they issue to be processed over at least two unaffiliated networks – Visa or Mastercard plus a competitor like NYCE, Star or Shazam.
Banks would choose which networks to enable but merchants would then choose which to use, resulting in competition over fees, security and service that is expected to save merchants and consumers over $15 billion a year. Rewards would not be affected, security would be improved, consumers would still use the same cards, and 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.
