Opinion: Action on credit card swipe fees is needed to reduce the burden of rising prices [Opinion]
behind labor. This means swipe fees often force business owners to raise prices to cover the added cost, sharing the financial burden with American consumers.
Unfortunately, due to a lack of free market competition in the credit card industry, merchants have little opportunity to push back. Visa and Mastercard have developed a duopoly, dominating nearlyof the market share. With that kind of control, both companies have struck what are essentially exclusivity deals with banks by way of using their card service.
The Credit Card Competition Act would change this by requiring a second network be made available to merchants attempting to process credit card transactions. Currently by way of using their card services, major banks agree to implement the swipe fee rates set by credit card companies, and only offer their single network to business owners.
Injecting the free market back into the payments sector would mean credit card companies would have to compete for business the same way merchants compete for consumers. Competition is a hallmark of the American economy and serves as a proven method to lower costs for consumers and drive innovation. Beyond helping to reduce prices, the Credit Card Competition Act takes new measures to protect our payments system from foreign entities. Banks currently have the ability to use China UnionPay for their card services, a state-owned financial services corporation,
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