Durbin, Marshall Statement on Judge Rejecting Visa & Mastercard Settlement with U.S. Merchants to Address Excessive Swipe Fees

CHICAGO – U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, and U.S. Senator Roger Marshall, M.D. (R-KS), lead sponsors of the Credit Card Competition Act, today released the following statement after U.S. District Judge Margo Brodie rejected the Visa and Mastercard settlement with U.S. merchants to temporarily lower credit interchange rates and cap those rates into 2030:

“We’re pleased Judge Brodie rejected this settlement, which we felt only temporarily provided concessions negotiated by a few lawyers behind closed doors.  And we are hopeful that Visa and Mastercard will now negotiate a settlement that truly benefits our merchants and small businesses.

“However, the only true solution is to pass our bipartisan, bicameral legislation—the Credit Card Competition Act—to enhance competition between credit card networks and ultimately lower costs for small businesses and consumers.  We need to bring real competition to the credit card industry.  Our bill ensures that the Visa-Mastercard duopoly ends their price gouging tactics that disproportionately hurt American families and small businesses.”

It is estimated that businesses paid more than $100 billion in swipe fees on Visa and Mastercard branded cards in 2023 alone.  In fact, swipe fees can be small businesses’ second highest cost behind only the cost of labor.

The Credit Card Competition Act of 2023 would enhance competition and choice in the credit card network market which is currently dominated by the Visa-Mastercard duopoly.  Building off of debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that largest credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.  The bill is estimated to save merchants and consumers $15 billion each year.

Visa and Mastercard wield enormous market power in credit cards; according to the Federal Reserve, they account for nearly 576 million cards, or about 83 percent of general-purpose credit cards.  Visa’s and Mastercard’s market power and network structure have enabled them to impose fees on U.S. merchants that are among the world’s highest.  These fees include interchange fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them.  Consumers ultimately pay for these fees in the price of the goods and services they buy.

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