Durbin Visits Local Chicago Business to Discuss Credit Card Competition Act

Durbin was joined by the Illinois Retail Merchants Association and small business owners who endorse the bill

CHICAGO – U.S. Senator Dick Durbin (D-IL) today convened the Illinois Retail Merchants Association and local small business owners to discuss his Credit Card Competition Act, bipartisan legislation that would enhance competition and choice in the credit card network market, which is currently dominated by the Visa-Mastercard duopoly.

“Illinoisans are concerned about inflation and the high prices of groceries and gas. What they may not know is that the fees charged by Visa and Mastercard when they use their credit card, known as swipe fees, are adding to this problem,” said Durbin. “These fees amount to billions of dollars each year, driving up prices forconsumers and squeezing the bottom lines of small businesses. My Credit Card Competition would inject real competition within the credit card market. Our economy thrives when competition is robust, and the credit card market should be no exception.”

“We thank Senator Durbin for his tireless work on behalf of Main Street retailers and consumers in communities large and small,” said Alec Laird, Vice President of Government Relations for the Illinois Retail Merchants Association. “All consumers, regardless of socioeconomic status, need food, medicine, and fuel to live and work in today’s modern society. They shouldn’t be asked to shoulder higher costs for these vital goods in the form of hidden credit card swipe fees, and retailers shouldn’t worry about whether these fees will prevent them from hiring additional employees or growing their business. The Credit Card Competition Act would provide much needed options to drive these fees down and provide relief for consumers and retailers alike.”

Last week, Durbin along with U.S. Senators Roger Marshall, M.D. (R-KS) and Peter Welch (D-VT) sent a letter to Visa and Mastercard insisting on an immediate reversal of their recent plans to increase credit card swipe fees on merchants and consumers again this fall—a move that would cost American businesses and merchants an additional $502 million annually. In the letter, the Senators renewed their calls for competition in the payment processing industry and slammed Visa and Mastercard for their price-gouging tactics at the expense of hard-working Americans. 

Along with Durbin, Marshall, and Welch, U.S Senator J.D. Vance (R-OH) also co-introduced the bipartisan bill. Building off of debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that the largest credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.

Visa and Mastercard wield enormous market power in credit cards; according to the Federal Reserve, they account for nearly 576 million cards, or about 83 percent of general-purpose credit cards.  Visa’s and Mastercard’s market power and network structure have enabled them to impose fees on U.S. merchants that are among the world’s highest, charging a total of $93 billion in U.S. merchant credit card fees in 2022.   These fees include interchange or swipe fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them.  Consumers ultimately pay for all of these fees in the price of the goods and services they buy.  Interchange fees are the second largest cost for many small businesses—only behind labor costs.