Merchants Welcome Biden Order on Competition and Say it Should be Applied to Payments Market

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

WASHINGTON, July 9, 2021 – The Merchants Payments Coalition welcomed an executive order on competition signed today by President Joe Biden and called for its principles to be applied to address lack of competition in the payments market.

“The clear message is that the Biden administration supports competition across all sectors of the economy and wants to tear down barriers to fair and open markets,” NACS General Counsel and MPC Executive Committee member Doug Kantor said. “Swipe fees charged by the credit and debit card industry are anti-competitive and harmful to Main Street businesses. With this executive order, we welcome action by the Department of Justice, Federal Trade Commission, banking regulators and other agencies to bring an end to anticompetitive practices in the payments industry.”

With the White House saying “lack of competition drives up prices for consumers,” Biden today signed an executive order establishing a “whole-of-government effort to promote competition in the American economy.” While the order’s six dozen specific initiatives affecting a wide range of industries did not directly address payments, lack of competition in banking was cited and regulators were directed to “provide more robust scrutiny of mergers” and allow consumers changing banks to download their banking data and take it with them. More broadly, the DOJ and FTC were told to “enforce the antitrust laws vigorously.”

Lack of competition has allowed credit card swipe fees to skyrocket in recent years. Banks that issue Visa and Mastercard credit cards charge merchants an average 2.25 percent of the purchase price to process transactions, according to the Nilson Report. Multiplied across millions of transactions each day, those fees more than doubled from $25.6 billion a year in 2009 to $67.6 billion in 2019. When all brands of credit and debit cards are included, processing fees totaled $116.4 billion in 2019, up 88 percent over the previous decade, according to Nilson. Debit card swipe fees are limited to 21 cents per transaction for the nation’s largest banks if they follow Visa and Mastercard’s fee schedules, but smaller banks can charge more.

Card processing fees are most merchants’ second-highest cost after labor and drive up prices paid by the average household by hundreds of dollars a year. U.S. merchants pay the highest swipe fees in the industrialized world, more than seven times the 0.3 percent for credit cards and 0.2 percent for debit cards allowed in Europe.

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.