In early June, lawmakers introduced the Credit Card Competition Act of 2023 in the US Senate and House of Representatives. The bill is nearly identical to one that was introduced last summer by Senators Dick Durbin and Roger Marshall. That bill was referred to the Senate Banking Committee, but a vote was never held.
Supporters of the legislation assert it will reduce merchant fees and costs to consumers by increasing competition and reigning in Visa and Mastercard which jointly control approximately 80% of the US credit card market. Opponents argue the bill will impose new costs on consumers and community banks, pose security risks and end credit card rewards programs. One of their key arguments is that retailers will not pass the proceeds of any fee reduction on to consumers. As evidence they point to a 2014 study by the Federal Reserve Bank of Richmond that found when the 2011 Durbin Amendment capped interchange fees on debit cards, only 2% of merchants lowered their prices.
For more information see this Wall Street Journal article.,
The US Department of Justice is investigating Mastercard regarding the potential violation of antitrust rules in its debit-card business. According to Bloomberg, in April, Mastercard received a civil investigative demand from the department seeking documents. Mastercard is cooperating with the probe.
The DOJ has been investigating Visa’s debit card practices since 2021.
For more details, see this Benzinga article. See Heightened Scrutiny of the Credit Card Industry for more information regarding ongoing probes of credit card industry practices.
For the US, the effective date for the Visa Digital Credential Updater Fee has changed from May 1 to July 1, 2023. Visa will charge a Visa Digital Credential Updater Fee (VDCU Cred Update Fee) of $0.12 for all VDCU activities. This fee will be billed when a token is used in a transaction for the first time following an update to that token’s PAN or expiration date.
In April 2023, the card brands implemented a number of new rate and rule changes. If you missed Verisave’s Client Alert, see April 2023 Card Brand Rule and Rate Changes for more details.
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