U.S. PIRG urges Congress to rein in Visa/Mastercard ‘swipe’ fees

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WASHINGTON — Following the recent announcements that Visa and Mastercard have raised the “swipe” or “interchange” fees that merchants pay for accepting credit and debit cards — fees that businesses generally pass on to consumers in the form of higher prices — Senate Judiciary Committee Chair Dick Durbin is holding a hearing Wednesday at 10:00 a.m. ET on “Excessive Swipe Fees and Barriers to Competition in the Credit and Debit Card Systems.”

The hearing is expected to examine interchange fees and other anticompetitive practices in the credit and debit card industries, and how rising interchange fees lead to higher consumer prices for goods and services and add to inflationary pressures.

U.S. PIRG’s Ed Mierzwinski, a witness at Wednesday’s hearing, issued the following statement:

“All consumers pay more at the store and more at the pump because the card networks’ anticompetitive practices force merchants to raise prices for all consumers, including cash customers. These increases pay, primarily, to subsidize the rewards cards of more affluent cardholders. The U.S. has among the highest swipe fees in the world and the 2010 Durbin amendment, which only applies to some debit cards, is the only U.S. restraint on card network practices that are strictly regulated in Europe, Canada and many other jurisdictions. 

“Just a few days ago, Visa and Mastercard raised interchange rates, despite the economic uncertainty caused by the pandemic and inflation. In fact, I believe that the big banks are happy with inflation — when gas prices double, their percentage-based interchange revenue doubles — without the banks making anything or doing anything.”