![]() ![]() Consequently, that ended up severely limiting the rewards banks offered for debit card purchases, effectively ending most debit card perks for consumers. Prior to that, the fee was based on a percentage of the total transaction. This legislation builds on previous efforts to curb transaction fees imposed on merchants, including a Dodd-Frank Wall Street Reform and Consumer Protection Act provision mandating merchants have at least two unaffiliated debit card networks when routing transactions.ĭodd-Frank also included an amendment added to the bill, establishing a fixed fee on debit card transaction processing known as the Durbin Amendment. In other words, a merchant who processes $100,000 per year in credit card transactions paid (on average) just $5 more in 2022 than in 2019. Based on Nilson data from 2019, 2020, 20, here's how this rate changed across all transactions processed on credit cards and private-label cards (those tied to a specific retailer and not usable at other merchants): However, this amount has largely remained flat, hovering around 2%, in recent years as a percentage of transaction volume. ![]() Overall, this totaled approximately $160 billion in card processing fees last year, per a Nilson Report. This is a key reason why some merchants have begun adding surcharges for those who don't pay in cash. Merchants are charged each time a consumer makes a purchase with a card the exact amount varies based on the type of card, type of transaction and other elements.įor example, if you go out to eat and use your credit card to pay the $100 bill, a merchant may incur a fee of 3% - which translates to $3 of the $100 purchase. Interchange fees, also known as swipe fees, are a primary revenue driver among credit card companies, which set fees for merchants in exchange for consumers being able to use credit cards at their establishments. It would prohibit Visa and Mastercard from being those with the largest market share of cards today. If enacted, the law would amend the Electronic Fund Transfer Act to require credit card-issuing banks to offer a minimum of two networks for merchants processing electronic credit card transactions. Lance Gooden, R-Texas, and Zoe Lofgren, D-Calif.Īs its name implies, the proposed legislation aims to inject more competition into the credit card industry to lower the fees merchants pay when shoppers swipe their credit cards. On June 7, 2023, Marshall and Durbin reintroduced the bill at a press conference with largely the same structure, with support from Sens. introduced the Credit Card Competition Act in 2022, and they later attempted to include it as an amendment to the 2022 National Defense Authorization Act, neither of which gained much traction.īy signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. To help answer your questions about the proposed piece of legislation, we've put together this primer that outlines what the bill would do and how it would potentially affect travelers and your hard-earned rewards. It can also mean more cash in your pocket, a better airport experience and the benefit of purchase protections that don't exist with other payment methods. Leveraging these rewards and the perks on popular credit cards gives you the ability to travel more frequently - or in greater comfort - and discover the world. Given that it has the potential to significantly negatively alter, if not completely eliminate, the world of credit card rewards that we know today, TPG stands firmly against this bill that could hurt consumers' ability to collect (and redeem) points and miles toward travel or earn cash back that can offset some of your everyday spending.Īt TPG, we teach our community how to maximize their rewards to earn as many as 3 points per dollar when dining out, 4 points per dollar on groceries and 5 points per dollar when booking airfare. Most recently, lawmakers threatened to thwart the fiscal year 2024 spending bill if it wasn't included, though thankfully efforts to advance the bill appear to have stalled for 2023.Ĭonsequently, we expect advocates to continue to push this proposed legislation next year. It's been nearly 18 months since the Credit Card Competition Act first came on the scene, and its proponents in Congress have tried a variety of tactics to push it through. Editor's note: This story is continually updated with new information. ![]()
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