Senators Grill Credit Card Executives Over Swipe Fees

WASHINGTON, D.C.- Senators on Capitol Hill grilled credit card executives Tuesday. The questioning focused on the swipe fees credit card companies charge merchants and its trickle down to consumers.

“I will tell you this, Visa and Mastercard, you awakened a sleeping giant. The retailers and merchants across America have had it,” Illinois Democrat Sen. Dick Durbin said. “Every time an American consumer makes a purchase using a credit card, a swipe fee is taken out of the transaction amount and divided between the credit card network and the bank that issued the card.”

Bill Sheedy, a senior advisor to the CEO of Visa, and Linda Kirkpatrick, president of Mastercard, fielded questions about proposed legislation Senators say would spur competition in the industry.

Durbin sponsored the Credit Card Competition Act with Kansas Republican Sen. Roger Marshall.

“I’m a hands-off, free market capitalist. But capitalism without competition leads to unchecked greed, the exploitation of hardworking Americans, and the erosion of opportunity,” Marshall said.

The legislation would give merchants access to payment networks beyond industry giants Visa and Mastercard. It’s a move senators say would increase competition and help consumers.

The banks argue savings wouldn’t be passed to consumers.

“The Credit Card Competition Act, however, would remove consumer control over their own payment decisions. Reduce competition, impose technology sharing mandates, and pick winners and losers by favoring certain competitors over others,” Sheedy said.

Missouri Republican Sen. Josh Hawley is a co-sponsor of the bill. With Visa and Mastercard controlling nearly 80 percent of the market, Hawley thinks Congress could go a step further and cap credit card interest rates.

“This is just classic, collusive monopoly behavior, and your testimony is you can’t accept any more competition. I agree with one thing: That my colleagues down the diocese said, which is that this is not a sustainable situation,” Hawley said.

“The high prices in this country are gutting the American people like fish, and we’re trying to address it. My strong advice to you is to sit down and try to work this out,” Louisiana Republican Sen. John Kennedy said.