The Credit Card Competition Act (CCCA) is once again back with Congress after first being proposed in 2022. The bipartisan legislation pits merchants against banks in a document aimed at lowering credit card swipe fees on each business transaction.
This time, President Donald Trump made a public announcement supporting the bill.
“Everyone should support great Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff,” Trump said in a post on his media site, Truth Social.
This is the president’s second recent attack on banks. Recently, he called for a credit card interest rate cap of 10%, effective Jan. 20.
Since Congress reintroduced the bill, retail organizations have released statements of support.
Jennifer Hatcher, chief public policy officer for the Food Industry Association (FMI), announced support, noting that the bill will support “disadvantaged” U.S. grocery customers and grocers by bringing down these fees.
“For far too long, Visa and Mastercard have arbitrarily increased credit card swipe fees on merchants and consumers and used the anticompetitive practice of setting these fees for the benefit [of] the issuing banks and credit unions in addition to themselves at a rate that often exceeds 3% while grocery profit margins sit at 1.7%,” said Hatcher.
Similarly, National Grocers Association (NGA) chief government relations officer Christopher Jones voiced the organization’s support. He noted that the two companies (Visa and Mastercard) control 80% of the credit card marketplace and allegedly refuse to negotiate fees with family-owned markets.
“This legislation is urgently needed to fix a credit card marketplace that is fundamentally broken and stacked against small businesses – especially independent community grocers,” said Jones.
This sentiment was also echoed by the National Retail Foundation.
Conversely, the American Bankers Association (ABA) warns that the CCCA would harm consumers and hurt small businesses.
“Anyone supporting Durbin-Marshall is voting to make credit card transactions less secure and to take away the credit card reward programs that make life more affordable for millions of Americans,” according to a joint statement from several banking industry leaders, including the ABA, America’s Credit Unions, Bank Policy Institute, and the Consumer Bankers Association.
What the Bill Could Mean for Grocers’ Margins
Also known as Durbin’s Bill or the Swipe Fee legislation, the bill was reintroduced in the Senate by Sens. Dick Durbin (D-IL) and Roger Marshall (R-KS), and in the House of Representatives by Reps. Zoe Lofgren (D-CA) and Lance Gooden (R-TX).
Taking aim at the 1-3% of “interchange fees” (plus flat fees) on each transaction that merchants pay to banks, if passed, the act would require major banks to issue credit cards that allow more choice for transaction processing.
In effect, this strategy endeavors to empower merchants with the choice to process transactions in a more competitive environment that has more than the two dominant players – Visa and Mastercard. Currently, the merchant pays whatever fee the consumer’s card runs on, rather than choosing among select options.
FMI asserts that these swipe fees totaled $187.2 billion in 2024, citing research from Nilson Report. The total increased 8.1% from the previous year, and 70% since the beginning of the pandemic, noted FMI. Moreover, the Merchants Payments Coalition calculated that swipe fees amount to an average of nearly $1,200 a year per American household, basing its analysis on the same Nilson data.
These fees, however, play a crucial role in funding credit card rewards. Therefore, the bill may affect how reward systems operate and how cash-back and reimbursement deals are structured. Without the capital injection from these fees, these companies may turn to other benefits to stay competitive.
“To us, this is political as it is another way for the president to blame the banks for high prices,” TK Cowen analyst Jaret Seiberg recently told Bloomberg.
Plus, Credit Union National Association deputy chief advocacy officer Jason Stverak told Nerdwallet back in 2023 that the bill could lead credit unions to be more risk-averse, offering Americans fewer lines of credit.
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