Paywalled, so quick summary:
More than 1,600 merchants, ranging from small businesses to the giant retailers Target and Walmart, are now supporting potential legislation, which "would direct the Federal Reserve to issue regulations that would require large banks that issue credit cards to enable at least one alternate network that isn’t affiliated with Visa or Mastercard." (Large means >$100 billion in assets.) In other words, you could swipe your card and the merchant could choose to send it over a third network, instead of being locked into VISA or Mastercard. This is intended to lower network fees by creating competition, and is similar to the rule already in effect for debit cards.
This is mostly an update covering the 1,600 retailers, a previous article (and thread) covered the legislation in more depth: https://ficoforums.myfico.com/t5/Credit-in-the-News/WSJ-Potential-new-legislation-to-add-competition...
* Swipe fees in the US are higher than anywhere else in the industrialized world
* Swipe fees in the US are 7 times higher than in Europe
* In 2021, card fees in the US were almost $138 billion
* VISA and Mastercard account for 77% of general purpose credit card use, in dollars
Alternate source (News Nation YouTube video where they interview a finance professor from the University of San Diego):
Same basics, but less details and more opinion. The professor calls the situation with VISA and MasterCard a "duopoly" (2 company monopoly), and says we should favor competition.
* Credit card processing fees are 1.5–3.5%
* The average family in the US pays $900/year in interchange fees
* If you look closely, the professor is waving a Citi Double Cash
Even a small percentage decrease in fees would add huge profit margins to retailers. Looks like consumers will pay the same no matter what, as mostly these types of costing benefits don't get passed on. I'm sure it'll be a decrease for rewards/points structures and subs also
They've already done this with debit cards. That doesn't stop some merchants from charging fees for debit card transactions as though they're credit cards. It does pad a merhcant's bottom line.
The fallout of this is that debit card issuers largely eliminated rebates for debit card purchases. If this becomes law, say goodbye to your 5% rebate for purchasing widgets on a third Tuesday every other odd-numbered month.
Love the part where they say we pay $900 per year in interchange fees as if their legislation means we will get to keep that money now.
Good grief. We all know that's not how it's going to work. We'll get screwed over and they'll have higher margins. What a crock.