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NSGA Continues Push to Support Credit Card Competition Act (CCCA)

Featured, NSGA News • January 15, 2024

DOWNERS GROVE, ILLINOIS (January 15, 2024) – NSGA, a member of the Merchants Payments Coalition, was a signatory to a letter to members of Congress urging their support of the Credit Card Competition Act (CCCA). The CCCA would help fix the broken credit card market that has allowed large banks and global card networks to block competition at the expense of US merchants and American consumers.

To contact your federal officials and encourage their support of the CCCA, click here.

Here is the text of the Merchants Payments Coalition letter to Congress:

January 10, 2024

Dear Member of Congress:

We are writing to ask you to support S. 1838/H.R. 3881, the Credit Card Competition Act, sponsored in the Senate by Senators Richard Durbin and Roger Marshall, and in the House by Representatives Lance Gooden and Zoe Lofgren. This is landmark legislation that would help fix a broken market that has allowed Wall Street megabanks and global card networks to block competition and unfairly profit at the expense of Main Street merchants and American families for far too long. Passing this bill is one of the most important things Congress can do to provide relief for small businesses and consumers struggling amid near-record inflation in every state and congressional district.

Most consumers don’t know it, but big banks and card networks like Visa and Mastercard charge merchants more than 2 percent of the customer’s total bill every time a credit card is used to make a purchase. Credit and debit card swipe fees have more than doubled over the past decade and soared 16.7 percent in 2022 alone to a record $160.7 billion. They are most merchants’ highest cost after labor – far too much to simply absorb – and drive-up consumer prices by more than $1000 a year for the average family. With few people using cash today, merchants have no choice but to accept cards for payment.

U.S. swipe fees are the highest in the industrialized world while banks and card networks in Canada, the United Kingdom and Europe charge a fraction of the amount while still providing generous rewards programs and other consumer perks.

Swipe fees have been able to rise so much because of lack of competition. Visa and Mastercard control more than 80 percent of the credit card market. And, unlike with debit cards, they block their competitors from handling many credit transactions. They restrict processing to their own networks, prohibiting competition from innovative independent payment networks that offer both lower fees and better security.

The Credit Card Competition Act would address this by requiring 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. Merchants would be allowed to choose which network to use,
meaning payment networks would have to compete to offer the best pricing, security and service.

This carefully crafted bill would apply only to financial institutions with $100 billion or more in assets – fewer than three dozen institutions nationwide but 90 percent of Visa and Mastercard credit card volume – and would have no impact whatsoever on small community banks or small credit unions.

Furthermore, this measure would provide redundancy that is essential in a world dependent on credit cards. Currently, there is no backup if Visa or Mastercard’s networks are hacked or suffer an outage, leaving millions of consumers with empty pockets and unusable cards. The availability of a second network would protect against such a cataclysmic breakdown of consumers’ ability to pay.

While this legislation would benefit all merchants, it is small retailers who are calling for swipe fee reform more than any segment of our industry. Small retailers have the narrowest profit margins and fewest resources and are hit hardest by continuing unjustified increases in swipe fees.

We call on you to choose Main Street merchants and American consumers over Wall Street megabanks and global card networks by cosponsoring the Credit Card Competition Act. Your constituents are counting on you.


Richard Durbin Roger Marshall Lance Gooden Zoe Lofgren Advocacy Credit Card Compeitition Act Senate Merchants Payments Coalition House of Representatives NSGA