What is the Credit Card Competition Act and Why It Matters?

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Credit: Sabastian Enges @ https://www.tiktok.com/t/ZP88yBRpU/ made a video of the following:

"You know that visa and MasterCard are planning on raising their swipe fees by over $500 million largely impacting Americans who already pay twice as much as Canadians and seven times more than Europeans and swipe fees many of us have gone to small businesses only to notice that there were passing those fees some of the consumer because they're becoming unbearable this is largely an unregulated thing why are they raising their rates because they can we send mastercards duopoly has allowed them to increase their swipe fees by 50% just since COVID the impact to the average American consumer is over $1000 a year coming out of their pocket just for using their products the credit card Competition Act aims to limit this ability and give more money back to the consumer and small businesses and limit the impact of another inflationary pressure on the American consumer this is an important bill to me personally because I love seeing bipartisan bills come through we have Republicans and Democrats working together for the American people and as part of for me conscious capitalism where we're putting people and profit back in focus and not just catering to crony capitalism if this bill is important to you or this message resonates with you I highly encourage you to reach out to your local representative and let them know this matters let's get it done."

Subject: Thank You for Raising Awareness About the Credit Card Competition Act

Dear Sebastian,

I recently came across your TikTok video discussing the significant impact of Visa and Mastercard's swipe fee increases, and I wanted to take a moment to thank you for bringing such an important issue into the spotlight. Your explanation of how these fees have been raised by over $500 million and how Americans are paying so much more compared to other countries was incredibly insightful.

Your message about the Credit Card Competition Act —and the effect these fees are having on both small businesses and consumers—resonated with me personally. I appreciate how you explained that the duopoly between Visa and Mastercard has allowed them to raise fees unchecked, costing the average American over $1,000 annually. The fact that small businesses are having to pass these fees onto consumers makes it clear how urgent it is to support legislation that fosters competition and reduces this burden.

I’m particularly impressed by how you highlighted the bipartisan nature of the Credit Card Competition Act. It's refreshing to see Republicans and Democrats working together to promote both conscious capitalism and policies that put people before profits. Your advocacy around this issue is crucial, and I, too, have reached out to my representative, Josh Harder, to show my support for the Act.

Thank you for using your platform to push for positive change and for encouraging others to take action. I hope this important bill gains traction and ultimately helps relieve the financial strain on both consumers and small businesses. I also reached out to my Rep Josh harder :)

Keep up the great work!

Vincent Cordova

Here’s a breakdown of Sabastian Enges message points:

Key Points of the Video Message:

- Visa and Mastercard Swipe Fees Increase :

- Visa and Mastercard plan to raise their swipe fees by over $500 million.

- These fees disproportionately impact American consumers, who already pay twice as much in swipe fees as Canadians and seven times more than Europeans.

- Impact on Small Businesses :

- Small businesses are increasingly passing these fees onto consumers, as they have become unbearable.

- Visa and Mastercard Duopoly :

- Visa and Mastercard's market dominance has allowed them to increase fees by 50% since COVID.

- This duopoly means they can raise fees because there is little competition to limit them.

- Cost to Consumers :

- Swipe fees cost the average American over $1,000 a year.

- The Credit Card Competition Act :

- This bill aims to reduce Visa and Mastercard's power to raise fees unchecked and relieve pressure on both consumers and small businesses.

- It represents bipartisan cooperation to address these issues and reflects principles of conscious capitalism, balancing profits with people.

- Call to Action :

- Encourages viewers to contact their local representative to support the Credit Card Competition Act and help push this legislation forward.

What is the Credit Card Competition Act and Why It Matters?

https://www.congress.gov/bill/118th-congress/senate-bill/1838/text

The Credit Card Competition Act is a piece of bipartisan legislation designed to introduce more competition into the credit card processing industry, specifically targeting the dominance of Visa and Mastercard. Together, these two companies control over 80% of the market, forcing merchants to pay high "swipe fees" for credit card transactions. These fees typically range between 1.5% and 3.5% per transaction, which can significantly cut into the profits of small businesses and drive up prices for consumers.

The Act, which applies to banks with over $100 billion in assets, would require these banks to enable at least one additional payment network on each credit card they issue. This change would allow merchants to choose a different, potentially cheaper network to process credit card payments, potentially saving billions in fees annually.

Proponents of the Act argue that it will help reduce costs for small businesses and consumers alike, boosting competition and breaking the Visa-Mastercard duopoly. Supporters, including various small business associations, say the bill could save businesses up to $11 billion a year, a benefit that could be passed on to consumers through lower prices.

However, there is some concern from banks and card issuers that the Act could hurt credit card rewards programs, which are partly funded by the fees merchants pay. Critics worry that while businesses might save on processing costs, those savings may not necessarily be passed on to consumers.

Why You Should Act Now

The Credit Card Competition Act is currently under debate in Congress. Your voice can make a difference. Many small businesses are in favor of the Act because it could reduce their operating costs and create a more competitive, fair marketplace. If you agree that lowering fees for merchants and consumers is important, you can urge your representative to support this legislation.

Take Action: Contact Your Representative

Here is the full link to find your representative in the U.S. House of Representatives:

https://www.house.gov/representatives/find-your-representative

This official page allows you to enter your ZIP code to locate and contact your congressional representative.

It's easy to make your voice heard. Below is a sample message you can personalize and send to your representative:

Copy and past :)

Subject: Support the Credit Card Competition Act

Dear [Representative's Name],

As your constituent, I am writing to express my support for the Credit Card Competition Act . This bill would help increase competition in the credit card processing industry, benefiting small businesses and consumers alike. The rising costs of swipe fees are a burden on local businesses, which are often forced to raise prices to account for these fees. By supporting this legislation, you can help reduce costs for merchants and make credit card transactions more affordable for everyone.

Please consider voting in favor of this important bill. Thank you for your time and for representing the interests of our community.

Sincerely,

[Your Name]

[Your Address]

[Your Email]