Washington, D.C. — During a hearing yesterday in the U.S. Senate Judiciary Committee on promoting competition in the credit card network market, a bipartisan set of Senators reiterated calls to break Visa and Mastercard’s duopoly, discussed how high swipe fees hurt consumers and small businesses, and explained the need to pass commonsense legislation like the Credit Card Competition Act. Members from the Lower Credit Card Credit Fees Coalition also sent a memo to the committee emphasizing the need for urgent change in this industry.

“Visa and Mastercard’s monopoly over the credit card network market imposes an invisible tax on every American family and small business, inflating prices on essentials like groceries and gas while funneling billions into corporate profits,” said Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. “The Credit Card Competition Act will inject competition into the system, saving consumers and businesses over $16 billion annually without sacrificing security or rewards. The credit card industry’s scare tactics and baseless claims are nothing more than a desperate attempt to protect their monopoly from a modicum of competition. It’s time for Congress to pass this commonsense solution.”

“The most conservative and the most liberal members happen to agree that we have to do something about this situation for [small business owners] across the country,” said Senator Dick Durbin (D-IL), Chair of the Senate Judiciary Committee. “I will say this to Visa and Mastercard, you awakened a sleeping giant. The retailers and merchants across America have had it. They are fighting for survival in an inflationary economy and aren’t getting any breaks at all…I put a proposal on the table…and it talks about something called competition. For god sake, competition over the swipe fees, that’s all we’re asking for. Give the merchants another venue to process these fees that are coming at their rate through Visa and Mastercard.”

“We did a professional survey of issues back home…96% of the people on this survey support our credit card bill,” said Senator Roger Marshall (R-KA) and co-sponsor of the Credit Card Competition Act. “The opponents of this bill have spent over $80 million attack myself, the Chairman, and this bill — that’s over twice that was spent on me in the Senate race. When [swipe fees] go up, consumers ultimately pay the price. The retailers pass those expense onto consumers, it’s that simple.”

“I’m a hands off, free market capitalist,” Senator Marshall added, “but capitalism without competition leads to unchecked greed, the exploitation of hardworking Americans, and the erosion of opportunity…Why would we stand by and allow Wall Street monopolies to siphon more and more money from our communities back home to enrich themselves. When faced with a choice, I’ll always side with Mainstreet over Wall Street and working families over monopolistic corporations.”

“This whole discussion on rewards, having a few of the numbers is really key here,” said Doug Kantor, General Counsel at the National Association of Convenience Stores, who testified at the hearing yesterday. “On credit cards, from consumers, the banks that issue credit cards get $120 billion in interest and fees. From merchants, they get $172 billion in swipe fees. Only $41 billion gets paid in rewards each year on $300 billion in revenue. This idea that rewards will go away if you reduce those fees — what’s estimated by the CCCA is $16 billion, now we’re at $284 billion combined to pay $41 billion in rewards. If the banking industry, which has the highest profit margins of any industry in the United States bar none, can’t make that work, I don’t know what we can do for them.”

“Arbitrarily high swipe fees are preventing me from growing my business and better serving my customers while inflating the prices we pay for the goods we sell and the prices we charge our customers,” said small business owner Chris Callahan, Co-Owner of Battenkill Books. “The bottom line is that I need your help. Most small business owners like me are skeptical that you care about our experience and will listen. I’m an optimist. I’m here. Please pass the Credit Card Competition Act. Give us a competitive market for credit cards that gives us a chance to grow and succeed.”

“You’ve got 80% market share, and you are paying off would-be competitors not to come into the market, while you charge [small business owners] how much more than big entities like Walmart. This is classic, collusive, monopoly behavior, and your testimony is that you can’t accept any more competition,” said Senator Josh Hawley (R-MO). “I don’t understand why you won’t accept the smallest modicum of competition when it comes to these retailer fees. I’m just here to tell you, this will not stand.”

“All of those wonderful things you described, fraud protection, consumer confidence, you do that in Europe just like you do so in the United States. So why not have [small business owners] around the country pay the lower rate? What’s the problem? You’re able to do it and make a profit,” said Senator Peter Welch (D-VT). “You are killing small business in the United States of America.”

“Visa and Mastercard and the retailers need to sit down and work this out. Because if you don’t, Congress is going to do something,” said Senator John Kennedy (R-LA). “I’m not sure what we’re going to do, but Visa and Mastercard, when we get through with you, you’re going to end up looking like the Post Office or the Dallas Cowboys…The high prices in this country are gutting the American people like fish.”

Read the Economic Liberties and partners’ memo to the Senate Judiciary Committee. 

Learn more about the Lower Credit Card Fees Coalition. 

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.