It’s frustrating that the same big banks and credit card giants continue to push their own social agendas in the name of the public good, while at the same time profiting from our nation’s heroes every day through credit card swipe fees.
Home to more than 252,000 veterans, Arkansas is no stranger to these lively festivals. Every time a veteran uses a credit card to buy a product at a military commissary in that state or any other state commissary, they are charged a usually undisclosed fee. This means that our Purple Heart recipients, Medal of Honor recipients, former prisoners of war, veterans with service-related disabilities, and veteran home caregivers, in addition to U.S. consumers, spend more than 2 percent of their total transaction value on average % .
Unfortunately, these fees continue to grow at an unprecedented rate, more than doubling over the past decade. The numbers speak for themselves; since 2001, the amount of card swipe fees has grown from $20 billion a year to $137.8 billion in 2021. Despite headwinds and record-high inflation, Visa and Mastercard — which control more than 80% of the credit card market — still imposed a $1.2 billion increase in April swipe fees by $1 billion.
To make matters worse, commissioners can’t choose which payment network to use to process credit card transactions, which means they can’t choose other lower-fee options. Little information is provided to consumers, not even on how many businesses are being charged, and how much prices have risen as a result. this is not right. Our country should honor those who have served, not allow them to be taken advantage of.
Fortunately, Sen. Roger Marshall, R-Kansas, and Sen. Dick Durbin, D-Illinois, recently introduced the Credit Card Competition Act to address unchecked burdens for veterans, businesses and consumers alike. If passed, the bill would require the largest U.S. banks to give Visa and Mastercard rivals a chance to process their credit card transactions. Currently, the Visa-Mastercard duopoly holds nearly 576 million cards and sets swipe rates for our American heroes. By requiring large credit card-issuing banks to offer the option of at least two networks, the legislation would create a more competitive market that ultimately encourages lower credit fees.
Contrary to what many of the big Wall Street banks who opposed the bill said, the Credit Card Competition Act only applies to financial institutions with at least $100 billion in assets, only 30 of our nation’s banks; it means the community banks our communities depend on and small credit unions will not be affected.
Card swipe fees are driving up the price of everyday essentials for our veterans. With high inflation and a looming recession, they can’t afford the extra cost. With the passage of the Credit Card Competition Act, we can bring real, free market competition to the credit card network and reveal the surcharges Wall Street relentlessly imposes. Our Arkansas Senate delegation, Senators John Bozeman and Tom Cotton, have long stood up for our veterans, and I hope they, along with their colleagues, will help them again with the credit card competition law.
Editor’s Note: Congressman. Marcus Richmond of R-Harvey represents District 21, which includes parts of Scott, Perry, Garland, Yell, Crawford, Sebastian and Polk counties. He served in the U.S. Marine Corps for more than 20 years, earning the rank of lieutenant colonel. The views expressed are those of the author.