Visa and Mastercard execs grilled by senators on 'duopoly,' high swipe fees
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The Senate Judiciary Committee convened on Tuesday for a hearing on the alleged Visa-Mastercard «duopoly,» which committee members from both sides of the aisle say has left retailers and other small businesses with no ability to negotiate interchange fees on credit card transactions.
«This is an odd grouping. The most conservative and the most liberal members happen to agree that we have to do something about this situation,» committee chair and Democratic Illinois Sen. Dick Durbin said.
Interchange fees, also known as swipe fees, are paid from a merchant's bank account to the cardholder's bank, whenever a customer uses a credit card in a retail purchase. Visa and Mastercard have a combined market cap of more than $1 trillion, and control 80% of the market.
«In 2023 alone, Visa and Mastercard charged merchants more than $100 billion in credit card fees, mostly in the form of interchange fees,» Durbin told the committee.
Durbin, along with Republican Kansas Sen. Roger Marshall, have co-sponsored the bipartisan Credit Card Competition Act, which takes aim at Visa and Mastercard's market dominance by requiring banks with more than $100 billion in assets to offer at least one other payment network on their cards, besides Visa and Mastercard.
«This way, small businesses would finally have a real choice: they can route credit card transactions on the Visa or Mastercard network and continue to pay interchange fees that often rank as their second or biggest expense, or they could select a lower cost alternative,» Durbin told the committee.
Visa and Mastercard, however, stand by their swipe fees.
«We consider them incentives, some people might consider them penalties. But if you can adopt new technology that
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