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U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, and U.S. Senators Roger Marshall, M.D. (R-KS) and Peter Welch (D-VT), along with the Merchants Payments Coalition and small business owners from across the country, recently held a press conference to address the issue of credit card swipe fees and the need for their bipartisan legislation, the Credit Card Competition Act. This act aims to enhance competition and choice in the credit card network market, which is currently dominated by the Visa-Mastercard duopoly.

Durbin emphasized that American consumers are already burdened by inflation and the high prices of groceries and gas. However, what they may not be aware of is that the fees charged by Visa and Mastercard, known as swipe fees, are contributing to the problem. Merchants are left with no choice but to accept these exorbitant fees if they want to accept credit cards used by their customers. The bipartisan Credit Card Competition Act, supported by numerous small business owners, seeks to introduce real competition into the credit card market and break up the privileged arrangement enjoyed by Visa, Mastercard, and big banks. Durbin called for Congress to bring the act to the floor for a vote.

Marshall argued that families’ budgets are already stretched thin, while Wall Street and the Visa-Mastercard duopoly continue to profit. He expressed his opposition to the credit card companies’ plan to raise interchange fees on merchants and consumers, labeling it as price-gouging and highlighting the disproportionate impact on American families and small businesses. Marshall believes that the credit card market is broken and requires a solution.

Welch acknowledged the challenges faced by small businesses today, particularly in competition with online retailers and big box stores. He emphasized that growing swipe fees on every transaction make it even harder for small businesses to thrive. Welch emphasized the need for the Credit Card Competition Act as a means to bring market forces into play and alleviate the burden on merchants.

The Merchants Payments Coalition also voiced their support for the Credit Card Competition Act. They called on Congress to pass the act, especially in light of Visa and Mastercard’s plans to increase fees once again. Doug Kantor, a member of the coalition and the National Association of Convenience Stores General Counsel, emphasized the urgency of the situation and the need to protect Main Street businesses.

The content mentioned that swipe fees have more than doubled over the past decade, rising to a record $160.7 billion in 2022 when debit card fees are included. It also featured statements from several business owners who expressed the impact of swipe fees on their establishments. They notably highlighted the need for the Credit Card Competition Act to address the unfair fees and protect small businesses from further financial strain.

To further push their agenda, the Senators sent a letter to Visa and Mastercard, demanding an immediate reversal of their plans to increase credit card swipe fees. This move would cost American businesses and merchants an additional $502 million per year. The letter reiterated the call for competition in the payment processing industry and criticized Visa and Mastercard for their tactics at the expense of hard-working Americans.

The bipartisan Credit Card Competition Act builds upon previous reforms in 2010 and directs the Federal Reserve to ensure that the largest credit card-issuing banks offer a choice of at least two networks for electronic credit transactions. The goal is to reduce the immense market power wielded by Visa and Mastercard, who currently account for around 83% of general-purpose credit cards. These companies have imposed some of the world’s highest fees on U.S. merchants, totaling $93 billion in 2022. These fees, including interchange fees and network fees, are passed on to consumers through the prices of goods and services.

In summary, the content highlights the urgent need for Congress to pass the Credit Card Competition Act to address the issue of high credit card swipe fees. The Act aims to inject competition and choice into the credit card market, currently dominated by the Visa-Mastercard duopoly. It has garnered support from small business owners and the Merchants Payments Coalition, who emphasize the burden these fees place on merchants and consumers. The Act builds upon previous reforms and seeks to reduce the market power of Visa and Mastercard in order to protect small businesses and alleviate the financial strain they face. Additionally, the Senators have sent a letter to Visa and Mastercard, urging them to reverse their plans to increase fees. The overall goal is to create a fairer credit card market with increased competition and reduced fees for merchants and consumers alike. With the help of AI legalese decoder, businesses can easily understand the intricate language of legislation and legal documents, enabling them to navigate the complexities of the Credit Card Competition Act and its potential benefits for their operations. This AI-powered tool can simplify legal jargon and provide comprehensive insights, improving understanding and enabling businesses to make informed decisions regarding the Act’s implications for their industry.

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