The National Grocers Association voiced its support June 8 for the Credit Card Competition Act introduced by Sen. Dick Durbin (D-IL), Sen. Roger Marshall (R-KS), Rep. Lance Gooden (R-TX) and Rep. Zoe Lofgren (D-CA) that would bring much needed competition to the credit card marketplace after years of excessive swipe fees that harm small businesses like independent grocers.
“This critical legislation would bring much needed reforms to a broken credit card marketplace that unfairly impacts small businesses like independent community grocers,” Christopher Jones, SVP of government relations and counsel, said in a statement.
“Visa and Mastercard control 80 percent of the credit card marketplace and will not negotiate fees with independent grocers. In a razor-thin margin industry like grocery, we have no choice but to pass those fees on to consumers in the form of higher grocery prices at a time when consumers are reeling from high food price inflation. The Credit Card Competition Act would provide much needed relief to independent grocers and their customers who benefit the most from competitive markets.”
Visa and Mastercard set the fees that they charge banks, the issuers of credit card. Under this current duopoly, these two card networks institute fee changes that lead to increases in merchants’ costs. They also block competitors from handling credit transactions by restricting processing to their own networks, stifling competition from independent competitors with lower fees and better security.
As a founding member of the Merchants Payments Coalition, NGA has worked alongside other merchant associations to address swipe fees for nearly two decades.
NGA fought for passage of the Durbin Amendment, a landmark law that brought debit swipe fee reforms, which prevent financial institutions from price-gouging debit interchange fees and led to increased competition and transparency in the debit marketplace. Last year, nearly 1,000 independent grocers joined a business community letter in support of the Credit Card Competition Act of 2022.
For more association news from The Shelby Report, click here.
