‘It Kind of Boggles My Mind’
That was the reaction of someone who knows what he is talking about — Coinbase CEO Brian Armstrong — to huge swipe fees that cannot be justified in this interview with Fox Business.
And, he didn’t stop there. He said:
“Why are we paying 2-3% every time we swipe our credit card, or the merchant is? Whether the merchant pays it, it just means the price is higher when you pay it, so either way, people are paying these fees.”
“It should not cost 2-3% every time you swipe your credit card. It’s just some bits of data flowing over the internet.”
The conclusion from a CEO who runs a company moving millions of dollars in payments on a regular basis?
“It should be free or close to it.”
That’s right. Moving electronic data to communicate payment information is cheaper than it’s ever been and, from someone in the know, it should be free or close to it.
Well, why isn’t it?
The swipe fees that cost the average American family $1,200 per year are high because of “classic monopolistic behavior” as Senator Josh Hawley noted during the Senate Judiciary Committee’s hearing on the topic last November.
(And, by the way, listen to what Armstrong says about the “big bank lobby” and its work on market structure legislation: “(It’s) them just trying to block their competition”)
With Visa and Mastercard literally telling thousands of banks (who usually compete with one another on fees) exactly how much in swipe fees to charge merchants, Main Street and its customers have no chance.
So, why do we let companies engage in price-fixing for a service that should be nearly free? It boggles the mind.
COMPETITION IS BETTER FOR EVERYONE
IT'S TIME TO PASS THE CREDIT CARD COMPETITION ACT