Durbin Visits Local Springfield Business to Discuss Credit Card Competition Act

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

SPRINGFIELD – 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. This legislation has received the endorsements of a wide range of small business, consumer, and university groups, as well as key unions, including International Brotherhood of Teamsters and the Service Employees International Union (SEIU).

“At a time when consumers and small business owners are already concerned about the high prices of everyday items, the Visa-Mastercard duopoly is only making it worse,” said Durbin. “That’s why I introduced the Credit Card Competition Act, which would introduce competition and choice to the credit card market and bring down excessive credit card fees. Our economy thrives when competition is robust, and the credit card market should be no exception.”

Last September, 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 then-planned increase to credit card swipe fees on merchants and consumers—a move that is estimated to 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. 

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 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.