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Senators Reintroduce Bid to Cut Merchants’ Credit-Card Swipe Fees

Senators Reintroduce Bid to Cut Merchants’ Credit-Card Swipe Fees

Lawmakers have revived a plan to let shop owners and other retailers choose a processing network rather than being forced to use Visa and Mastercard when shoppers pay with credit cards. Members of the Senate and House introduced versions of the bill with bipartisan support.

  • Visa and Mastercard reap network fees to process credit card transactions. They also set interchange fees that stores pay to banks that issue the cards. Lawmakers said the planned changes could lower the fees merchants pay.
  • The Electronic Payments Coalition said the legislation would let WalmartTarget, and other retailers process credit card transactions where it costs less for them, ignoring consumer benefits such as cybersecurity and credit card rewards programs, which are subsidized by interchange fees.
  • The National Retail Federation supports the bill, saying skyrocketing swipe fees have been driving up prices for consumers for too long and adding that competition would bring fees under control and improve security.
  • Sen. Dick Durbin (D., Ill.) introduced a similar bill last year that made it to the Banking Committee but never got to a vote. Visa’s shares closed down 1.3% on Wednesday, while Mastercard’s stock fell 2.3%.

What’s Next: TD Cowen analyst Jaret Seiberg said expectations are low that the bill will make it into law. It isn’t an issue that voters care about, he said. Jefferies analyst Trevor Williams told clients his contacts in Washington think the bill faces long odds, MarketWatch reported.

Janet H. Cho from barrons