Mastercard Responds to Congressional Letter on Credit Card Competition Act

Mastercard (NYSE: MA) wrote to several members of the U.S. Congress to highlight the harms the Credit Card Competition Act would “bring to consumers, businesses of all sizes and financial institutions.

Today’s payments ecosystem enables consumers “to make purchases safely and securely while gaining access to credit and valuable benefits like zero liability.”

These benefits are under attack, according to Mastercard.

The letter explains how the Credit Card Competition Act would “remove consumer choice, erode security, eliminate rewards, and prevent small businesses from investing in their future.”

As stated in the letter, Mastercard writes in response to a letter dated September 13, 2023.

To be clear, Tucker Foote, EVP, Public Policy, notes:

  • Mastercard is not increasing US interchange rates this fall.
  • Mastercard is not raising network fees in the US required for the processing of transactions this fall.
  • Electronic payments empower consumers, allow merchants of all sizes to thrive, and strengthen the American economy.

Mastercard‘s technology protects consumers “from fraud and keeps them safe.
Mastercard is not increasing US interchange rates this fall.”

Mastercard is not raising interchange rates this fall, and they claim t0 “never had plans to do so.”

Despite incorrect accusations, interchange rates “are not skyrocketing.” They are “remarkably flat,” the firm claims.

Nilson data show that merchant processing costs per transaction “have actually decreased since 2018.”

This decrease stands in stark contrast “to gas and grocery prices, which have both risen more than 20% over this period.” Any insinuation that interchange plays a role “in these rising prices is patently false.”

Network fees are distinctly “different from interchange fees and are an important part of managing a globally interoperable network.”

Mastercard further noted:

“With respect to network fees required for the processing of transactions, Mastercard is not raising these in the US this fall—any network fee changes are either optional or they pertain to value-added services for banks and are not associated with transaction processing.”

The payments industry has never been more competitive.

The firm added:

In addition to cash and check, Mastercard aggressively competes with global and regional networks, buy now pay later providers, person-to-person and account-to-account services, real-time payments platforms (including from the Federal Reserve), digital currencies, wallet providers, and open banking companies.”

In the past 12 months, more than $20 billion in fraud was reportedly “prevented by one Mastercard product alone – Safety Net.” That impact is further amplified “by the full suite of our services and protections.”

Mastercard concluded:

“The Credit Card Competition Act will thwart the competition you seek to protect.  The legislation will remove consumer choice, erode security, eliminate rewards, and dramatically prevent small businesses from investing in their future. Competition is threatened when policy is made in the absence of facts.”

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