The fight over a bill targeting credit card fees pits payment companies against retailers

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Visa Inc. and Mastercard Inc. credit cards are arranged for a photograph in Tiskilwa, Illinois, U.S. A bipartisan push in Washington to clamp down on credit card fees is pitting retailers against network payment processors — and both sides are working hard to gain the attention of consumers. The Credit Card Competition Act was reintroduced last month in both the House and the Senate, after not being brought up for a vote in either chamber during the previous Congress. The measure aims to bolster competition for credit card processing networks by requiring big banks to allow at least one network that isn't Visa or Mastercard to be used for their cards. This would give merchants who pay interchange fees a choice they otherwise rarely get. Amazon , Best Buy , Kroger , Shopify , Target and Walmart are among the list of nearly 2,000 retailers, platforms and small businesses urging lawmakers to pass the bill. Retailers in support of the legislation argue credit card processing costs are hurting consumers by driving up the cost of business, and, in turn, the price shoppers pay at checkout. On the other side of the fight, major credit card processing networks like Visa , Mastercard , Discover and Capital One say the bill will actually hurt consumers by diminishing popular credit card rewards programs and lessening fraud protections. Bipartisan support for the bill has surged since it was introduced last year. As of now, there is no vote scheduled on the measure in either chamber of Congress, but there are indications a vote could come by year-end. Doug Kantor, a member of the Merchants Payments Coalition executive committee, remains "optimistic" that the Credit Card Competition Act could end up as an amendment attached to a larger piece of legislation at some point. "It's time to inject real competition into the credit card network market, which is dominated by the Visa-Mastercard duopoly," Sen. Dick Durbin, D-Ill., said in a statement to CNBC. He's a sponsor of the bill and one of its most outspoken advocates. Visa and Mastercard account for 80% of all credit card volume, according to data from the Nilson Report, a publication tracking the global payment industry. Durbin says the legislation would "help reduce swipe fees and hold down costs for Main Street merchants and their customers." Swipe fees are often built into the price consumers pay for goods and services and have more than doubled in the past decade, hitting a record $160.7 billion in 2022, according to the Nilson Report. On average, U.S. credit card swipe fees account for 2.24% of a transaction, according to the Merchants Payments Coalition. That's why some businesses add a surcharge to bills for customers paying with debit or credit cards to encourage cash transactions. The new legislation would require banks with assets over $100 billion to provide customers with a choice of at least two different payment networks to process credit card transactions. The bill also stipulates that Visa and Mastercard can only account for one of the choices as a way to prevent the two largest networks from being the only options offered to merchants. "Interchange fees are effectively attacks on commerce," said Shopify president Harley Finkelstein. "We began to notice that these fees kept climbing and climbing and climbing, and we felt that something was up." The e-commerce platform known for helping businesses create their own custom digital stores, operates in 175 countries worldwide. ""Relative to every other country Shopify operates in, interchange fees are the highest in America," Finkelstein said. Larger platforms and retailers like Amazon, Shopify and Walmart, as well as payment processors like Capital One, Discover and Visa, are funding efforts to pass or block this bill. In total, 26 organizations have mentioned the Credit Card Competition Act by name in their 2023 first-quarter lobbying reports, which were filed before the legislation was reintroduced last month, according to data from Open Secrets, a nonprofit group tracking campaign finance and lobbying data. The Electronic Payments Coalition, a group representing big banks, credit unions, community banks and payment card networks said the legislation "would add billions of dollars to the bottom lines of mega-retailers every year while eliminating almost all the funding that goes towards popular credit cards rewards programs, weakening cybersecurity protections, and reducing access to credit," in a June 9 post on its website.