Credit Card Competition Act Explained

Date: October 06, 2022

Legislation would give small businesses a choice between at least two credit card networks for to process transactions

Small business owners often operate on razor-thin profit margins, margins that have been cut further in recent years as credit card networks’ swipe fees have increased. Swipe fees have more than doubled since 2012 and the problem has been exacerbated by pervasively high inflation, which acts as a multiplier as swipe fees are a percentage of each sale.

Small businesses do not have the market power to negotiate with large credit card companies on swipe fees, so legislation in Congress is seeking to introduce crucial competition into the market. Two identical pieces of legislation were introduced in the U.S. House of Representatives and the U.S. Senate that would promote the freedom of choice and allow small businesses the ability to choose between at least two credit card network options to process transactions. NFIB wrote letters of support to the House and Senate for H.R. 8874 and S. 4674 to help advance this important legislation.

“The Credit Card Competition Act of 2022 would inject much-needed competition into the credit card processing market by allowing small businesses the freedom to choose between multiple processing networks,” said Jeff Brabant, NFIB Director of Federal Government Relations. “This legislation injects competition into the credit card processing market and reins in rapidly rising ‘swipe fees’ charged to small businesses that accept credit cards. It will harness the power of competition to give small business owners real choices when it comes to credit card processing networks. This competition will force networks to compete for business the same way that small businesses must compete for customers every day.”

Giving small business owners more credit card network options will force larger credit card companies to compete with each other to lower swipe fees and provide more options for small businesses.

Take Action: Tell Congress to rein in credit card swipe fees and allow small business owners the ability to choose between credit card networks.


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