WASHINGTON, D.C. — A diverse group of organizations representing workers, small businesses, competition and consumer advocates, launched a new ‘Lower Credit Card Fees’ Coalition to dispel myths surrounding the bipartisan Credit Card Competition Act (CCCA) and urging Congress to pass it. The new microsite home for the coalition, lowercreditcardfees.com, which includes crucial background on how the legislation would address significant market failures in the credit card payment network, comes alongside new research from government watchdog Accountable.US, which highlights the dark money at play in this legislative fight.
A new report from Accountable.US found that credit card industry trade groups, including the Electronic Payments Coalition, as well as the largest credit card-issuing companies and banks, have spent a combined $51 million while lobbying against the Credit Card Competition Act. This spend comes amid major hires and a desperate influence campaign from the Electronic Payments Coalition.
The full coalition of groups includes Accountable.US, American Economic Liberties Project, Americans For Financial Reform, Consumer Reports, Fight Corporate Monopolies, International Brotherhood of Teamsters, Institute for Local Self-Reliance, Merchant Payments Coalition, and Service Employees International Union
Swipe fees are a drain on the American economy, extracting billions from small businesses and households every year," said Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. "By dismantling Visa and Mastercard's tight duopoly, the CCCA will spur competition within the payment network industry and drive down prices. It's no surprise that so many small businesses, from restaurants to convenience stores and gas stations, are championing this legislation; swipe fees are often their highest expense. We urge Congress to reject the bank lobby’s spin and pass the CCCA.”
“The Credit Card Competition Act will help lower the credit card swipe fees hurting small businesses across the country,” said Helen Brosnan, Executive Director of Fight Corporate Monopolies. “And that’s exactly why Wall Street is lining up to influence policymakers to use bogus right-wing rhetoric to try and block it. Let’s be clear, this bill will break Visa and Mastercard’s duopoly and inject desperately-needed competition into credit card payment networks to lower prices to the benefit of working people everywhere.”
“The credit card industry is spending millions lobbying to convince Congress that more competition is a bad thing. Lack of competition is why business owners are burdened with record high swipe fees that get passed onto consumers, jacking up costs on everything from gas to groceries even for families who pay in cash,” said Liz Zelnick, Director of the Economic Security & Corporate Power, Accountable.US “The fact Europeans enjoy generous credit card rewards and low swipe fees proves the scare tactics by U.S. industry lobbyists are based on greed, not reality.”
“Consumers, hard-working union members and small businesses alike are tired of high credit card fees and the money big Wall Street banks take out of their pockets,” Merchants Payments Coalition Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “Swipe fees cost the average family more than $1,000 per year. It’s time for Congress to protect consumers, workers and small businesses from the central price-setting of the Wall Street giants.”
"The current credit card interchange system is uncompetitive, non-transparent, and harmful to consumers," said Renita Marcellin, Legislative and Advocacy Director of Americans for Financial Reform. "All consumers pay more at stores and at the pump due to the anticompetitive practices of Visa and Mastercard, which set both the rules and prices for merchants to accept electronic payments. The Credit Card Competition Act is an important step in fixing this disparity."
"We consistently find in our research that concentrated market power is the single biggest threat facing independent businesses. When I speak with small businesses, credit swipe swipe fees is a top issue," said Lauren Gellatly, Advocacy and Campaigns Manager with the Institute for Local Self-Reliance. "This monopoly tax must be addressed through legislation like the Credit Card Competition Act."
The Credit Card Competition Act is a crucial step towards rectifying the longstanding hold of the Visa-Mastercard duopoly. Visa and Mastercard’s market power allows them to set sky-high swipe fees, ten times higher than they charge in Europe, that have more than doubled over the past decade. Merchants have no way to negotiate rates and have no choice but to accept the rates Visa and Mastercard set. These fees are then passed onto consumers. As a recent Economic Liberties Myth-Fact policy brief explains, the Credit Card Competition Act will require banks issuing credit cards to offer multiple payment networks on their cards, jump-starting competition that will lower swipe fees and enhance security and other features, ultimately benefiting both consumers and small businesses.
Visit lowercreditcardfees.com for more information on the new coalition.