WASHINGTON—The Biden administration wants to loosen the grip that Visa and Mastercard have on routing debit card payments in online transactions and the billions in interchange fees that come with it, Bloomberg Law reported.
The Justice Department’s Antitrust Division and the Federal Trade Commission recently endorsed a May proposal by the Federal Reserve to reopen Dodd-Frank Act rules that capped the fees retailers pay and required banks and other debit card providers to offer more payment network choices for routing transactions.
The Fed wants to expand the 2011 rules to cover rapidly growing “card-not-present” transactions—primarily online shopping and automatic bill payments—to rein in alleged anticompetitive behavior by giants like Visa and Mastercard, which process roughly 75% of all debit transactions, Bloomberg Law said.
In 2019, interchange fees across all debit and general-use prepaid card transactions totaled $24.3 billion, according to the Fed.