Executives at banks and credit unions are worried about how they’ll compensate for a potentially significant loss of interchange fee revenue if a bill proposed by Sen. Dick Durbin, D-Ill., and Roger Marshall, R-Kan., becomes law.
For community financial institutions, the impact on their credit card programs could be severe, with subsequent budget cuts likely to impact digital innovation, marketing and new product research and development, several analysts and bankers say.
The Credit Card Competition Act of 2022 aims to break up the “duopoly” of Visa and Mastercard and force gatekeepers to allow other processors to handle card transactions. The goal is to lower the swipe fees paid by merchants. A companion bill was introduced in October in the House of Representatives by Reps. Peter Welch, D-Vt., and Lance Gooden, R-Tex.
Durbin is capitalizing on a hot topic — inflation — to advance his battle against swipe fees. “Credit card swipe fees inflate the prices that consumers pay for groceries and gas,” he argues in a press release.
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