So called "Credit Card Competition Act"

[Gumby]

I'm sure many like the web for its indecent content.

 

[Phroig]

"...there would be no decent content on the web...l

there's decent content on the web? ;-)

early-retirement.org?

 

[Koolau]

I'm sure many like the web for its indecent content.

Oh, you mean all the cat videos?

 

[ychuck46]

I don't like it. No sir, not at all

If I could no longer receive 2% cash back, but everything cost 2% less, well, that's obviously a wash. Is that what would happen? I have no idea.

Do you believe in the Tooth Fairy, or the Easter Bunny? You would have to be the type of person that did if you think businesses will lower their prices with a reduction in the fees they pay for CC swipes. They won't and people who play the CC rebate game are the only ones who will take a hit. Typical of Congress to hit the little people while protecting their donation flow from big business.

 

[Koolau]

They won't and people who play the CC rebate game are the only ones who will take a hit. Typical of Congress to hit the little people while protecting their donation flow from big business.

Dead, for now

https://viewfromthewing.com/durbin-marshall-credit-card-competition-act-fails/

Apparently those little people rose up and told Congress where to get off on this bill. Keep in mind those people who play the CC money-back game are legion. It really doesn't take much outrage to kill a bill. YMMV

 

[mpeirce]

Any legislation attached to other, larger legislation I assume to be nefarious in some way.

What do credit card laws have to do with the National Defense Authorization Act?

 

[ERD50]

Do you believe in the Tooth Fairy, or the Easter Bunny? You would have to be the type of person that did if you think businesses will lower their prices with a reduction in the fees they pay for CC swipes. They won't and people who play the CC rebate game are the only ones who will take a hit. Typical of Congress to hit the little people while protecting their donation flow from big business.

Since you said "businesses" in general - any business with a reasonable level of competition *will* lower prices if their costs decrease.

If that were not true, how do you explain this:

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epmr_pte_nus_dpg&f=w

Retail gas price June 2022 $5.00
Retail gas price Dec_ 2022 $3.09

CC companies my lack enough competition, I don't know. But the businesses that use them are generally in a competitive environment. So in general, your comment is conspiracy level stuff. Tons of examples of this all over, check the history of the price of hard drives lately? And so on.

-ERD50

 

[sengsational]

^ If there is competition and transparency, cost will get squeezed out. There isn't quite enough of either in the standard operations, but there are forces in action that might unseat the entrenched players. That's likely to be where cost will get squeezed out.

 

[Gumby]

In my experience, businesses only complete if they must. If they can get away with price fixing, market allocation or monopolization conduct, then they will do that instead. I prosecuted plenty of them for violating the antitrust laws.

 

[jollystomper]

Out of curiosity I submitted a letter to my congressional representatives with the concerns expressed. Here is one response I received (will not reveal name or party to keep Porky at bay ):

Dear Jollystomper,

Thank you for contacting me regarding the Credit Card Competition Act. I appreciate hearing from you and apologize for the delayed response.
I appreciate your concern regarding interchange fees, also known as payment card swipe fees. As you may know, payment network companies like Visa and Mastercard levy interchange fees on merchant sales that are purchased using their credit and debit cards. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act directed the Federal Reserve to establish a cap on these fees for debit card transactions. There are currently no federal restrictions on interchange fees for credit card transactions.
The Credit Card Competition Act aims to increase network competition in credit card transactions by allowing smaller payment network companies to compete with established companies like Visa and Mastercard. It's sponsors argue that by increasing competition, network companies will have an incentive to lower interchange fees.
It is critical that our financial system is governed by laws and regulations that protect consumers and allow small businesses to compete against large corporations. I remain concerned about the effect that excessive credit card swipe fees could have on consumer prices and main street retailers. At the same time, it is critical that any proposed reforms of interchange fee regulations consider the potential impact on small and community financial institutions.
As a member of the <redacted>, I will keep your views in mind as the <redacted> considers this important matter.
Again, thank you for sharing your thoughts, and please do not hesitate to contact me whenever I may be of service.

Sincerely,
<redacted>

 

[ychuck46]

Not really

CC companies my lack enough competition, I don't know. But the businesses that use them are generally in a competitive environment. So in general, your comment is conspiracy level stuff. Tons of examples of this all over, check the history of the price of hard drives lately? And so on.

Your response about a competitive environment is typical when it comes to defending all businesses, and definitely cherry picking to use a business like hard drives to buttress your point. When have hard drives not been coming down over the years? BTW, I was in the IT hardware sales space for decades so please don't try to school me on those businesses. Many businesses do not have competition to speak of; do you think the ones in that situation will lower their prices? Absolutely not, and consumers will see no difference in price at those places, while those of us who play the CC game will suffer. Call it conspiracy level stuff all you want; after a lifetime in the corporate world I have a healthy distrust of most businesses in general.

 

[ERD50]

In my experience, businesses only complete if they must. If they can get away with price fixing, market allocation or monopolization conduct, then they will do that instead. I prosecuted plenty of them for violating the antitrust laws.

But of course, which is why I include the caveat " with a reasonable level of competition" in my comment.

And while I certainly don't doubt that there are 'plenty of them' that find a way to utilize bad conduct, there are, I think, many many more that are in a competitive market, fighting for our dollar. Like most anything, the 'bad guys' get the attention, like cable/internet, some utilities, etc. The 'good guys' don't anger us, so we don't tend to talk about it (OK, see the counter to the "Blow That Dough" thread for examples of consumers utilizing competitive markets to their advantage).

At any rate, I'm glad you fought the ones that were anti-competitive, a competitive market is important.

-ERD50

 

[ERD50]

Your response about a competitive environment is typical when it comes to defending all businesses,...

So what if it is 'typical'? The relevant question is - does it reflect reality, or not? The 'typical' response to "what is 2+2?" is "4" - does that make it wrong? And I didn't defend "all businesses", I had the caveat of "in a competitive market".

... and definitely cherry picking to use a business like hard drives to buttress your point. When have hard drives not been coming down over the years? ...

Not cherry picking, just the first/best example that came to mind (since I just purchased a bunch of memory). There is almost no end to examples, use your imagination, it won't take much. Here's an oldie but a goody - aluminum once was more prized than gold.

https://clintonaluminum.com/aluminum-was-once-worth-more-than-gold-and-silver/

The fact that hard drives have been coming down for a long time just bolsters my observation.

Y ... Many businesses do not have competition to speak of; do you think the ones in that situation will lower their prices? .... I have a healthy distrust of most businesses in general.

I covered that - my comments were aimed at competitive markets, and non-competition should be addressed, one way or the other. I also don't 'trust' a business, but I have a decent amount of faith in the 'free market' (when/where it exists). And for the pedantic, I realize no market is 100% 'free', there are rules, regulations, etc - I just mean 'relatively' free.

-ERD50

 

[Alan]

Today I was walking down the town and bumped into a friend who was also walking down and one of the things he planned to do was call into the store to buy a box of cereal and he was saying that he had forgotten to put some cash into his pocket because he felt guilty about buying things of such low value with a debit or credit card. I told him not to worry about it because the fees were a very small percentage of any purchase, large or small and since the vast majority of purchases were by card these days that any cost to the stores are long since baked into the prices they charge.

I then Googled the fees and showed him that for debit cards it is always 0.2% and for credit cards always 0.3%. I also told him that I always use my no fee credit card because it has a 1% cash back reward. Every now and then I go into the bank app to see the cash back balance and apply it as a refund to my card. When our daughter arrived here last year she signed up to Chase UK for a bank account and receives 1% cash back on her debit card purchases. She probably has a UK credit card now that she has had had a chance to build a credit score.

On my way back I thought that the fees seemed even lower than I remembered and recalled a recent thread here discussing the fees. Must admit I’m surprised that the fees here are so low here compared to the USA.

 

[audreyh1]

On my way back I thought that the fees seemed even lower than I remembered and recalled a recent thread here discussing the fees. Must admit I’m surprised that the fees here are so low here compared to the USA.

Yes, very noticeable in the Netherlands. They are quite strict about low bank fees. Most people use the universal bank debit system. I know that Albert Heijn, the major grocery store, does not accept credit cards at all. It’s ether cash or bank card or VPay or Maestro which are local low cost cards issued by Dutch or European banks.

 

[Alan]

Yes, very noticeable in the Netherlands. They are quite strict about low bank fees. Most people use the universal bank debit system. I know that Albert Heijn, the major grocery store, does not accept credit cards at all. It’s ether cash or bank card or VPay or Maestro which are local low cost cards issued by Dutch or European banks.

Good to know, it’s been a good few years since I’ve been to The Netherlands but have a trip planned next year. Using cash shouldn’t be a big deal if you know ahead of time. This year we rented an apartment in Barcelona and the local grocery stores we used all accepted our credit cards as usual, but Barcelona has a big tourist industry so may be different to Spain in general.

 

[CaptTom]

Any update on this legislation? A week or two ago I got an e-mail from one of my credit card providers asking customers to contact their legislators to oppose it.

 

[audreyh1]

Good to know, it’s been a good few years since I’ve been to The Netherlands but have a trip planned next year. Using cash shouldn’t be a big deal if you know ahead of time. This year we rented an apartment in Barcelona and the local grocery stores we used all accepted our credit cards as usual, but Barcelona has a big tourist industry so may be different to Spain in general.

I think MasterCard logo debit cards are supposed to work now. Maybe VISA logo debit cards too.

I had no issue in Spain credit accepted everywhere we traveled. I think this is a Netherlands thing. They are even more frugal than the Scots - well I guess they would argue heartily over it.

Also in the major tourist areas in the Netherlands this is less of an issue. I was researching because DB lives in an outer suburb of Amsterdam not a tourist area.

I’m used to getting cash, but I’m going to try ApplePay with a debit card next Albert Heijn visit instead.

Maestro is being replaced this year. https://www.betaalvereniging.nl/en/actueel/nieuws/dutch-ready-new-debit-cards/

 

[Alan]

I think MasterCard logo debit cards are supposed to work now. Maybe VISA logo debit cards too.

I had no issue in Spain credit accepted everywhere we traveled. I think this is a Netherlands thing. They are even more frugal than the Scots - well I guess they would argue heartily over it.

Also in the major tourist areas in the Netherlands this is less of an issue. I was researching because DB lives in an outer suburb of Amsterdam not a tourist area.

I’m used to getting cash, but I’m going to try ApplePay with a debit card next Albert Heijn visit instead.

Maestro is being replaced this year. https://www.betaalvereniging.nl/en/actueel/nieuws/dutch-ready-new-debit-cards/

Excellent, thanks for this.

 

[audreyh1]

Excellent, thanks for this.

I will no better after our trip later this month.

 

[dixonge]

Any update on this legislation? A week or two ago I got an e-mail from one of my credit card providers asking customers to contact their legislators to oppose it.

It's alive again!

https://www.nfib.com/content/analys...mpetition-act-of-2023-amendment-vote-on-hold/

 

[jazz4cash]

Any update on this legislation? A week or two ago I got an e-mail from one of my credit card providers asking customers to contact their legislators to oppose it.

I contacted my reps. I got one clueless form letter response and one detailed response explaining that the bill was to support mom and pop stores vs. the big box retailers. I asked my barber and the neighborhood coffee/sandwich shop about it. They both preferred a credit card or other epayment vs. cash and were ok with the fees. Of course neither is competing with Walmart.

 

[CaptTom]

Yeah, I call BS on any politician pretending they're doing anything for "small Mom & Pop" retailers. I doubt that's who's pressing for this law while making huge campaign contributions.

It's true smaller businesses have higher swipe fees than the big corporations, but that's true with all their expenses. If it's not profitable to run a Mom & Pop store anymore, why should I subsidize them?

 

[jazz4cash]

Yeah, I call BS on any politician pretending they're doing anything for "small Mom & Pop" retailers. I doubt that's who's pressing for this law while making huge campaign contributions.

It's true smaller businesses have higher swipe fees than the big corporations, but that's true with all their expenses. If it's not profitable to run a Mom & Pop store anymore, why should I subsidize them?

It was BS from a newly elected rep….very disappointed but not surprised. The long term guy sent the clueless form letter. I think we all know it can cost a bit more when we patronize mom and pop stores. I see more places impose a surcharge to pay with credit card. I’m OK with that when it is disclosed prominently.

 

[CaptTom]

Good point. If Mom & Pop offer me a better value, I'm willing to pay more, be it higher prices or a credit card surcharge. If they can't, their business model doesn't work any more and they need to find a better model or get a job at Walmart.

I've also seen those surcharges at non-profits. Again, if I want to help them out, I'm happy to pay it.

I noticed our local BJs gas station raised their "member" rates about 5 cents (relative to the market), and also raised their BJ's card holder discount from 10 to 15 cents. They're getting closer to the 5% cash back I get from my PenFed card. They've already beat out the 2% back cards.

BJs used to be consistently 10-15 cents lower than the competition, but since they've been pushing their own credit card, it's getting easier to find other stations selling for less.

Paying by credit card saves the expenses (and risks) of handling cash. It's more of a benefit to some businesses than others, which I assume is why different businesses are charged different CC processing fees. If the big retailers want to save those fees, they can offer me cash back for using their card. Lowe's does. I shop there all the time. Home Depot stopped doing that. I don't go there any more.

Free enterprise works. At least, until the biggest companies bribe their way into the legislative process with campaign contributions, and laws like this emerge.