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Senator Dick Durbin (D-IL) is looking to breathe new life into his “Credit Card Competition Act” bill that’s been stuck in Congress for two years and counting. With new hearings and renewed interest from both sides of the political spectrum, Senator Durbin’s bill has reignited discussions on the dominance of Visa and Mastercard in the U.S. credit card market. Here is all you need to know about the Credit Card Competition Act and the bill’s future in Congress.
Current Landscape of the Credit Card Industry
Visa and Mastercard dominate the credit card industry, controlling around 80% of the U.S. credit card transaction market. Many argue that this dominance has created a duopoly, limiting competition and driving up merchant fees. SMBs and consumers alike are significantly impacted by these “junk fees” that unnecessarily drive up costs. People fear that credit card companies like Visa and Mastercard have become overreliant on junk fees and are placing it at the core of their business models.
What Is the Credit Card Competition Act?
The Credit Card Competition Act pursues the same outcomes achieved in the Durbin Amendment, but instead of debit cards, the focus is on credit cards. The objective of the Credit Card Competition Act is in its name–injecting a healthier level of competition into the credit card market, which should reduce the prevalence of these junk fees we previously mentioned. Banks must ensure that at least one card network is available to merchants other than Visa or Mastercard. Theoretically, this would create new competition by expanding the options available to merchants. Since they wouldn’t be forced to choose between Mastercard and Visa, these card networks would have a more challenging time staying competitive while relying on junk fees. Senator Durbin claims that consumers and businesses would save up to six billion dollars in the plan’s first year.
Support, Challenges, & Industry Pushback
Despite having bipartisan support, Senator Durbin’s bill isn’t without its challenges. SMBs and large retailers have come out supporting this legislation, while major banks and payment companies are actively campaigning against it. Senator Durbin has had difficulties making progress, having scheduled and subsequently canceled a hearing in April due to his inability to get Visa and Mastercard’s CEOs as witnesses.
Evolve Payment’s End-of-Year Checklist
It’s too early to tell the fate of the Credit Card Competition Act, but it’s not too early to stay aware so your business can prepare for what’s to come. Merchants who stay proactive have a much easier time navigating the complex financial landscape, and that’s where preparation becomes essential. Speaking of preparation—the Evolve Payment team has created a thorough and easy-to-use checklist for merchants preparing their business for 2025. We designed this checklist to help you stay organized, optimized, and ready for the ongoing success of your business next year. Get your free copy today and have peace of mind heading into 2025.