Lawmakers Join the Call for Visa & Mastercard to Withdraw Swipe-Fee Increases Slated for This Month

WASHINGTON, D.C. —  A bipartisan group of four politicians wrote a letter to the CEOs of Visa Inc. and Mastercard Inc., strongly urging both companies not to increase the fees merchants pay when they accept consumers' credit cards. According to the National Retail Federation (NRF), such increases to interchange swipe fees would amount to $1.2 billion.

The letter, signed by U.S. Sens. Richard J. Durbin (D-Ill.) and Roger Marshall (R-Kans.) as well as U.S. Reps. Peter Welch (D-Vt.) and Beth Van Duyne (R-Texas) and sent to Alfred F. Kelly Jr., Visa CEO and Michael Miebach, CEO of Mastercard, suggests the politicians would not be concerned if the credit card companies operated in an "environment with real competition."

"However, the current electronic payment system is a clear duopoly that your companies dominate, and you impost fees and rules that merchants, consumers and small banks have no real choice but to accept," the letter reads. "Because normal competitive market pressures are not currently at play to constrain your fee rates, we are speaking out."

The politicians' letter goes on to point out that both Visa and Mastercard were "enormously profitable" in 2021 even though they refrained from raising interchange swipe fees last year.

"Bottom line: we urge you to withdraw your plan to raise credit card and debit fees on American business owners and hard-working American families," the letter concludes. "As Americans are dealing with the highest rate of inflation in decades, your profits are already high enough and any further fee increase is simply taking advantage of vulnerable Americans."

Trade groups, including the Merchants Payment Coalition (MPC) and the NRF, applauded the letter. As Convenience Store News reported, the MPC in March unveiled an advertising campaign to educate Congress and other policymakers on increasing the swipe fees credit card networks and big banks charge merchants to process transactions.

"It's very significant that lawmakers from both parties and both chambers of Congress have come together to stand up against the global card giants to protect small businesses and consumers," said Anna Ready Blom, a member of the MPC executive committee and director of government relations at NACS. "This shows that this is an issue that crosses political lines. This is about the card industry continuing to profit on the backs of Main Street merchants and hard-working American families at a time when they can least afford it.

"Inflation is handing big banks and card networks an unearned windfall because their fees go up as prices go up," Blom continued. "On top of that, they are trying to impose additional anticompetitive rules and practices that will allow them to continue their domination of the payments market while shutting out innovators who would bring transparency and competition. Small businesses want the card industry to compete the same as they do, and it's good to see that members of Congress from both parties agree."

American consumers are struggling under the worst inflation in four decades and these increases would only make the situation worse, added NRF Vice President for Government Relations, Banking and Financial Services Leon Buck.

"Swipe fees are a percentage of the transaction, so banks and card networks are already receiving an unearned windfall as they piggyback on higher prices," he said. "They're going to see billions of dollars more in revenue this year even if rates stay the same, so an increase would only add insult to injury."