Importance of Credit Card Competition Act Emphasized by Capital One-Discover Deal

DOWNERS GROVE, ILLINOIS (February 23, 2024) – The National Sporting Goods Association (NSGA) is a supporter of the Credit Card Competition Act (CCCA), which would bring much needed reform to credit card swipe fees by introducing new competition into the processing market. Visa and Mastercard, acting as a duopoly, control more than 80 percent of the credit card market and block their competitors from handling many credit transactions. They restrict processing to their own networks, prohibiting competition that offers lower fees. These fees are charged to merchants for every credit card transaction, raising operating costs for businesses and increasing the cost of goods and services in the US.

On February 19, Capital One announced it will acquire Discover Financial Services in a transaction valued at $35 billion and would close in late 2024 or early 2025. The acquisition would allow Capital One to compete with larger card-issuing banks such as JP Morgan Chase. Unfortunately, this acquisition is likely not enough to bring competition into the processing market. While Discover has its own smaller network to process payments, Visa and Mastercard require financial institutions issuing their cards to route transactions on their network, which includes Capital One.

Please contact your federal officials and voice your support for the CCCA to benefit merchants and consumers in America. You may find your elected officials by clicking here.