FOR IMMEDIATE RELEASE
Contact: J. Craig Shearman
(202) 257-3678 craig@shearmancommunications.com
WASHINGTON, November 12, 2024 – The Merchants Payments Coalition welcomed today’s announcement that the Senate Judiciary Committee will hold a hearing next week on rising credit card “swipe” fees that cost American small businesses and families billions of dollars each year.
“We look forward to this hearing because we want as many opportunities as possible to talk about the growing financial hardship excessive swipe fees have caused for American families, small businesses and the economy,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “The card industry, on the other hand, wants to hide the facts and pretend the problem doesn't exist. That’s why Visa and Mastercard’s CEOs have refused to show up for a hearing and have fought to avoid any hearings or votes on legislation to bring desperately needed competition to the broken payments market. This hearing will show lawmakers how anticompetitive practices and a broken market are causing these fees to constantly rise with negative impacts on their constituents. Once they’ve heard the facts, Congress needs to quickly pass this landmark pro-consumer legislation. American families and small business owners can’t afford to wait any longer.”
Senate Judiciary Committee Chairman Richard Durbin, D-Ill., one of the lead sponsors of the Credit Card Competition Act along with Senator Roger Marshall, R-Kan., announced today that he will hold a hearing on November 19. Durbin has invited representatives of Visa and Mastercard along with merchant, consumer and banking organizations.
The hearing will be the 18th on swipe fees over the past 18 years. The most recent was held by the Senate Judiciary Committee in May 2022, just before the CCCA was first introduced. Credit and debit card swipe fees totaled $160.7 billion that year but soared to a record $172 billion in 2023, according to the Nilson Report.
Swipe fees are most merchants’ highest operating cost after labor and have more than doubled over the past decade. They are too high to absorb, especially for small merchants, and drive up consumer prices by an estimated $1,100 a year for the average family. Payments consulting firm CMSPI estimates that the costs are even higher than the Nilson numbers, at $224 billion with an impact of $1,700 a year.
Visa and Mastercard – which control 80% 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 CCCA would require banks with at least $100 billion in assets to enable cards 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 expected to save merchants and consumers over $16 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.
