WICHITA Kan.– Merchants continue to maintain the pressure on Congress to pass a proposed bill that would affect card interchange, legislation that credit unions strongly opposed.
In Kansas, the state’s merchants met with one of the bill’s co-sponsors, Sen. Roger Marshall (R) to thank him for his support of the Credit Card Competition Act. Marshall is co-sponsoring the bill with Sen. Richard Durbin (D-IL).
“Kansans and other Americans pay the highest swipe fees in the industrialized world and lack of competition is the reason why,” Merchants Payments Coalition Executive Committee member and National Association of Convenience Stores Director of Government Relations Anna Ready Blom said. “These fees drive up prices paid by consumers and Visa and Mastercard have refused to hold off on increases despite raging inflation. This legislation is carefully crafted to apply only to giant Wall Street banks and would have no impact on community banks or credit unions in Kansas. Consumers’ credit card rewards would be protected since banks, not processing networks, issue those rewards. And security would be enhanced because independent networks have less fraud and networks backed by foreign governments like China’s Union Pay would be barred from entering the U.S. market.”
Who Was Present
According to the organization, Blom was one of about 20 merchants and trade association executives who met with the Republican senator at the district office.
The gathering included retailers, restaurants, grocers, convenience store owners and fuel merchants, among others, the Kansas organization said.
In announcing their visit with the senators, the merchants group again stated that credit and debit card swipe fees have more than doubled over the past decade, “soaring 25% last year alone to a record $137.8 billion. They are most merchants’ highest cost after labor and drive up consumer prices by about $900 a year for the average family.
“Visa and Mastercard, which control more than 80 percent of the credit card market, restrict processing to their own networks and set the fees the banks charge, prohibiting competition among those banks and blocking innovative independent payment networks that offer both lower fees and better security,” the statement continued.
What Bill Proposes
The legislation would require that credit cards issued by the nation’s largest banks be enabled to be processed over at least two unaffiliated networks – Visa or Mastercard plus an independent network such as NYCE, Star or Shazam. Domestic credit card networks like American Express or Discover could also be the second network, but not networks supported by foreign governments like China’s Union Pay, the merchants group stated.
Merchants would be allowed to choose which of the two networks to use, “meaning networks would have to compete on pricing, security and service,” the merchants said.
The bill would apply only to financial institutions with at least $100 billion in assets—fewer than three-dozen institutions nationwide but representing 90% of Visa and Mastercard credit card volume, the merchants said – and would have “no impact on small community banks or small credit unions,” the Merchants Payments Coalition said.
Although Navy FCU is the only CU above that threshold, credit unions have expressed firm opposition to the bill.
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