Visa and Mastercard's fee drama: Senators demand answers

<p>In a world where plastic rules, the power play between US Senators and
credit card giants Visa and Mastercard is heating up. As is their want, a group
of Senators are “demanding answers” and slamming fee increases that could cost
American businesses $502 million annually. Are the card giants playing hardball
at the expense of hard-working Americans? Or are the Senators just gaining easy
political capital?</p><p>Mastercard and Visa under fire</p><p>Senator Roger Marshall has taken the reins in this high-stakes game.
Alongside Senate Majority Whip Dick Durbin and Senator Peter Welch, Marshall,
and four House Representatives, fired off a letter to <a href="https://www.financemagnates.com/tag/visa/" target="_blank" rel="follow">Visa</a> and <a href="https://www.financemagnates.com/tag/mastercard/" target="_blank" rel="follow">Mastercard</a>,
demanding an immediate about-face on their impending credit card swipe fee
hikes.</p><p>These fee increases, set to roll out this fall, have raised eyebrows.
If they proceed, American businesses and merchants could be left holding the
bag to the tune of $502 million each year. It's a real hit for the economy, and
the Senators are not having it.</p><p>Credit Card Competition Act</p><p>In June, Senators Marshall, Durbin, J.D. Vance, and Peter Welch dropped
a bombshell in the form of the bipartisan Credit Card Competition Act (CCCA), the original overview of which can be read <a href="https://www.durbin.senate.gov/imo/media/doc/The%20Credit%20Card%20Competition%20Act%20of%202023%20-%20one-pager.pdf" target="_blank" rel="nofollow">here</a>. The
goal? To inject some much-needed competition into the credit card industry and
put an end to Visa and Mastercard's duopoly. It's their way of giving the
little guys a fighting chance and who doesn’t love that?</p><p>The letter is part of a long running battle between the politicians and the card companies:</p><blockquote><p lang="en" dir="ltr">Senators Dick Durbin, a Democrat, and Roger Marshall, a Republican, urge Visa and Mastercard to cancel plan to raise swipe fees <a href="https://t.co/FioHCeBLDC">https://t.co/FioHCeBLDC</a></p>— Bloomberg (@business) <a href="https://twitter.com/business/status/1697027607617790342?ref_src=twsrc%5Etfw">August 30, 2023</a></blockquote><p>The CCCA proposes a simple solution – It would mandate a second routing
option be offered to merchants. This simple fix would force the major credit
card companies to compete and give some power back to merchants who would
finally have the option to choose other networks and fairer fees.</p><p>The Senators are not pulling punches, accusing Visa and Mastercard of
profiteering while ordinary Americans bear the brunt of their actions. In a
world grappling with rising costs for essentials like fuel and groceries,
hiking credit card fees feels like rubbing salt in the wound. The Senators
argue that American families and small businesses have shouldered the burden
for far too long.</p><p>As the battle unfolds, Visa and Mastercard find themselves in the hot
seat, facing off against a determined group of Senators. Will these card giants
reverse their fee hikes, or will they dig in their heels? Only time will tell,
but one thing's for sure—the showdown is far from over.</p>

This article was written by Louis Parks at www.financemagnates.com.