ABMA Priority Spotlight: The Credit Card Competition Act

S1838: The Credit Card Competition Act

SUPPORT

Focused on introducing competition into the credit card network market, presently dominated by the Visa-Mastercard duopoly, the Credit Card Competition Act (CCCA) has stood as a key legislative priority for ABMA since its first introduction in 2022. In addressing concerns about inflation and escalating prices, the CCCA’s broader impact is anticipated to positively influence consumer spending and provide relief to small businesses grappling with the financial strains associated with high transaction fees.

As retailers grapple with substantial swipe fees, ranking just below labor costs, their ability to invest in expansion is stifled. The year 2022 witnessed a staggering $126.4 billion in swipe fees paid by U.S. retailers, marking a significant 20% increase from the preceding year. With a resounding 81% of consumers backing legislation aimed at fee reduction, and 73% expressing trust in small businesses over large banks for advocating fair policies, it is evident that consumer sentiment favors change.

Here’s How the CCCA Will Help:

Increased Payment Options: The act stops credit card networks from limiting the number of networks businesses can use for transactions. This gives retailers more choices, leading to better service and lower fees.
Routing Flexibility: This prevents networks from controlling how transactions are routed, so businesses can choose the fastest or cheapest options. This could save retailers money and make transactions smoother.
Security Technology Adoption: Under this provision, networks are unable to force businesses to use security tech that only works with one network. This encourages the adoption of security measures that work across different networks, making transactions safer for everyone.
National Security Considerations: By mandating the creation of a public list identifying networks with security concerns or foreign ownership, the act aids businesses in recognizing potential threats, allowing them to make informed decisions regarding their payment collaborators.

ABMA strongly supports the CCCA as it aims to empower merchants, promote better service, and reduce costs, fostering a fairer credit card market. We urge lawmakers to prioritize the passage of S. 1838 to bring about positive changes in the credit card market.

Download our comprehensive PDF guide to discover more about the Credit Card Competition Act and ways you can contribute.