A Senate Judiciary Committee hearing yesterday focused on the proposed Credit Card Competition Act (CCCA), which seeks to break up the Visa-Mastercard monopoly. NACS General Counsel Doug Kantor was among the witnesses.
Visa and Mastercard 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.
The hearing saw Senators on both sides of the aisle agree that swipe fees are unsustainably high and that the reason is a fixed system.
Senator Roger Marshall (R-KS), pointed out that the average American family spends over $1,100 annually on swipe fees and that “swipe fees [in the U.S.] are over nine times higher than in the EU, four times higher than China, and twice that of Canada.”
“This is just classic collusive, monopolistic behavior,” said Sen. Josh Hawley (R-MO).
Sen. Peter Welch (D-VT), called the fees “rip-off prices,” and accused Visa and Mastercard of “killing small business.”
In his testimony, Kantor pointed out that the huge costs of the system, which disproportionately impact lower-income Americans, are “an ongoing problem, and consumers don't know it. Everything about this is hidden from them. They're not aware of the role Visa and MasterCard play. They're not aware of the other processors in the system. They're not given information about the pricing or the fact that there’s any fees at all.”
Another witness, Roger Alford, a professor at the University of Notre Dame Law School, stated: “Although, as a conservative, I prefer antitrust litigation over regulation, this is a market in which antitrust litigation has never resolved the fundamental problems of Visa and Mastercard’s anticompetitive behavior.”
NACS members are encouraged to reach out to their members of Congress and ask that they support the Credit Card Competition Act. NACS makes it easy for retailers and suppliers to send a message to their legislators via the NACS Grassroots Portal.