WASHINGTON– During the same week numerous credit union groups are in Washington lobbying against the Credit Card Competition Act, the Merchants Payments Coalition is praising remarks on the Senate floor by sponsors of the legislation who blasted Visa and Mastercard’s reported plans to increase credit card swipe fees by more than $500 million beginning in October.
“Despite the nearly $100 billion Visa and Mastercard took out of communities and small businesses across the country last year, guess what they’re going to do in October? They’re going to raise the interchange fee again,” said Sen. Richard Durbin (D-IL). “While we’re trying to fight inflation from every angle that we can find to bring down the cost of groceries and gas, the credit card companies have decided it’s just the right time to have this take-it-or-leave-it fee increase. When credit card fees go up, it increases inflation and consumers pay it.”
Report Cited
Durbin was joined by Sens. Roger Marshall (R-KS) and Peter Welch (D-VT) in making floor speeches. The three are co-sponsors of the Credit Card Competition Act in the Senate, along with Sen. J.D. Vance (R-OH).
The Merchants Payments Coalition and the senators all cited a Wall Street Journal report that Visa and Mastercard plan to increase swipe fees by $502 million a year beginning in October, citing data from payments consulting firm CMSPI.
‘Pigs Get Fat, Hogs Get Slaughtered’
“I rise today with a clear message to Wall Street: Enough is enough,” Marshall said. “At a time when Kansans are facing the highest inflation prices in 40 years, small businesses are fighting to keep their costs low while Wall Street plots their next payday, announcing they are doubling down and hiking up their fees on merchants and consumers yet again this fall. I’m not going to stand for the massive, wealthy corporations price-gouging small businesses at every turn.
“In Kansas, we have a saying: Pigs get fat, hogs get slaughtered,” Marshall added. “Visa and Mastercard have gotten hoggish on the backs of hard-working families.”
In a statement, Welch said Visa and Mastercard’s “massive pricing power” has allowed credit card swipe fees for the two networks to grow from $33 billion in 2012 to $93 billion last year.
“They’re doing what monopolies and duopolies do,” he said. “They abuse that pricing power, and they just stick it to our merchants. They justify what they’re doing because it’s a convenience for the shopper. It is a convenience for the shopper. It’s a convenience for the merchant. But how does that justify a rip-off?”
Merchants Press for Passage
The MPC again urged Congress to move forward on the legislation, which proponents say is designed to lower swipe fees that average 2.24% of the transaction but can range as high as 4%.
The legislation 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 well-established, high-security competitors like NYCE, Star or Shazam.
“That would make networks compete over fees, security and service and is expected to save merchants and their customers $15 billion a year,” the MPC stated.
Credit Unions in Town
As CUToday.info has reported, this week in Washington NAFCU hosted its annual Congressional Caucus, while numerous state leagues have also been in town with Hill hikes of their own.