The Ratings Game: What possible credit-card legislation could mean for Visa, Mastercard — and you

by | Jul 28, 2022 | Stock Market

Credit-card companies look to be under a political microscope once again as senators announced a new bill that would target Visa Inc. and Mastercard Inc. Sen. Dick Durbin, an Illinois Democrat, and Sen. Roger Marshall, a Kansas Republican, introduced a bill Thursday that would seek to offer merchants alternate routing options when consumers pay with many Visa
and Mastercard
credit cards.

As it stands, when consumers pay with a Visa credit card, merchants typically have to process that through the Visa network, but the Credit Card Competition Act of 2022 would require that merchants get a choice of at least two networks. This would be similar to what’s already required for most U.S. debit cards, due to the Durbin amendment that passed in the shadow of the financial crisis. The Wall Street Journal first reported on the proposed legislation Wednesday. Merchants have a contentious relationship with the card industry, chafing at increases to the fees that they’re required to pay members of the financial system when consumers make card purchases. Visa and Mastercard set interchange fees, which merchants pay to card-issuing banks. Merchants also are charged network fees that go to Visa and Mastercard. Retailers argue that card fees are excessive and that, while consumers don’t pay the fees themselves, they may feel t …

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