Durbin Visits Local Peoria Small Business to Discuss Credit Card Competition Act

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

PEORIA – U.S. Senator Dick Durbin (D-IL) today convened the Illinois Retail Merchants Association and a local small business owner 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. This legislation has received the endorsements of a wide range of small business, consumer, and university groups, as well as key unions, including the International Brotherhood of Teamsters and the Service Employees International Union (SEIU).

“Across Illinois, the story is the same—small businesses are faced with exorbitant credit card fees and a ‘take it or leave it’ choice imposed by Visa and Mastercard,” said Durbin. “In 2022 alone, Illinois merchants and consumers paid $3.8 billion in credit card swipe fees to line the pockets of the biggest Wall Street banks. It’s time to pass my Credit Card Competition Act to introduce competition and choice to the credit card market and bring down excessive credit card fees.”

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.  The bill is estimated to save merchants and consumers $15 billion each year.

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 more than $100 billion in credit card fees in 2022.  These fees include interchange 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 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.