Consumer watchdog organization Accountable.US recently published a report accusing finance giants Visa and Mastercard of operating as a duopoly to prevent competition in the debit and credit card payments sector.
According to the report, which has been viewed by Cointelegraph, the two companies have spent more than $80 million lobbying against legislation that would allow competitors access to the payments sector.
Because Visa and Mastercard account for the majority of credit and debit card transactions in the United States, Accountable.US alleges that they’re responsible for the “sky-high” swipe fees faced by both consumers and businesses.
“Visa, Mastercard, and their army of corporate lobbyists have spent millions to try and convince Congress that increased competition is a bad thing for consumers,” said Liz Zelnick, director of Accountable.US’ economic security and corporate power program. She added:
“Despite their claims, it’s a lack of competition that’s burdening small business owners and their customers with sky-high swipe fees. Swipe fees are a hundred billion dollar drain on our wallets, and it’s time Congress put its foot down against anti-competitive credit card companies.”
Ultimately, Zelnick concluded that the lack of competition created by what Accountability.US dubs the Visa–Mastercard “duopoly” has contributed to “jacking up costs on everything from gas to groceries” for those in the US, “even for families who pay in cash.”
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The report references the US Department of Justice’s (DOJ) recent antitrust suit against Visa. As Cointelegraph recently reported, the DOJ has alleged that Visa engaged in practices to incentivize institutions against partnering with competing payment service providers.
“This lawsuit is a reminder why Congress must act to give federal regulators more tools to ensure a fairer marketplace,” wrote Zelnick, adding that this could only be accomplished by passing the Credit Card Competition Act.
Credit Card Competition Act
The Credit Card Competition Act of 2023 is a piece of bipartisan US legislation introduced by Democratic Senator Dick Durbin and Republican Senator Lance Gooden.
It’s also notably supported by current Republican vice presidential candidate J.D. Vance. Based on the latest available information, the Senate has yet to set a date to bring it to the floor for discussion or a vote.
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