NACS endorses U.S. legislation to reduce credit card ‘swipe fees’
House bill joins Senate bill to address swipe fees by bringing competition to credit cards.
The association that represents the country’s 148,000-plus convenience and fuel retailers announced its support for bipartisan legislation introduced today in the U.S. House of Representatives that creates choice for the processing of credit card purchases.
The bill endorsed by NACS seeks to bring long-overdue competition to the credit card market and addresses the exorbitant swipe fees paid by Americans every year.
The Credit Card Competition Act, introduced by Rep. Peter Welch (D-VT) and Rep. Lance Gooden (R-TX), would require the largest U.S. banks that issue Visa or Mastercard credit cards to allow transactions to be processed over at least two unaffiliated card payment networks—the same process that has been used for debit card transactions for more than a decade.
The legislation proposes an open marketplace for credit card processing in which retailers could choose which payment network to use to handle a transaction. Currently, networks equipped to route these transactions have been blocked from entering the market by Visa and Mastercard, which dominate the U.S. market and issue 83% of all credit cards.
This legislation would result in $11 billion annually in savings for American businesses and consumers, according to the payments consulting firm CMSPI.
Convenience store swipe fees totaled $14 billion in 2021, a 26% increase over the year prior, and during the first half of 2022, credit card swipe fees were up another 33%.
“These fees are simply outrageous because there is no competition. Our stores compete every day for consumers’ business—as does every other business in the country. This competition also drives innovation. In the broken credit card market, no competition means a lack of innovation and an open invitation for these large multinational corporations to continually increase rates and take advantage of a system that only benefits them,” said NACS President and CEO Henry Armour.
In May 2022, NACS General Counsel Doug Kantor testified before the U.S. Senate Committee on the Judiciary, underscoring the exorbitant swipe fees levied on retailers and how those fees are the direct result of price-fixing by Visa and Mastercard.
