Proposed Credit Card Competition Act Aims to Tackle Rising Swipe Fees

OLYMPIA - Big banks on Wall Street are currently in the spotlight as they advocate for an increase in credit card swipe fees, a move that has the potential to impact businesses and consumers. These financial institutions have been able to reap significant profits from credit card transactions due to the dominant position of two major companies, which control 80% of the market. The influence of these companies allows them to set fees and terms without much room for negotiation, leading many businesses to either absorb the non-negotiable fees or pass them on to consumers.

In response to this situation, a bipartisan proposal known as the Credit Card Competition Act has emerged. This proposed legislation seeks to introduce competition into the credit card processing sector by mandating the inclusion of two processing networks on each card. Advocates argue that such a move could result in substantial annual savings, estimated at up to $15 billion for businesses.

A recent survey conducted by the Merchants Payments Coalition indicates that over 65% of those surveyed support the Credit Card Competition Act. This level of support underscores the growing concern among businesses and consumers about rising swipe fees.

Visa and Mastercard, two major players in the credit card industry, have announced plans to increase swipe fees. Over the past decade, these fees have more than doubled, significantly impacting merchants and potentially influencing consumer prices.

As discussions around the proposed Credit Card Competition Act gain momentum, there is increasing pressure on Congress to address the issue of rising swipe fees. The economic implications of this matter remain a focal point of the ongoing dialogue.