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Credit Card Competition Act of 2022 Could Result in Annual Savings Upward of $11 Billion

CMSPI estimates pro-competitive policies on U.S. debit have saved merchants and consumers billions


CMSPI estimates that merchants have paid nearly $794 billion in credit and debit card interchange fees since Congress began investigating swipe fees in 2006, with $564 billion in fees being collected on credit card interchange fees alone.

As a leading global payments advisory firm, CMSPI is focused on ensuring payments become more productive and efficient for all industry stakeholders and that businesses have technology-driven, data insights to make informed business decisions. CMSPI welcomes policy initiatives that create competition and transparency for payment card services globally. The Credit Card Competition Act represents a policy that looks to inject competition into credit card services. The bill was introduced in the Senate in late July by Senator Richard Durbin (D – IL) and Senator Roger Marshall (R – KS). On September 19th, this bill was also introduced in the House of Representatives, by Rep. Peter Welch (D – VT) and Rep. Lance Gooden (R – TX). With the second introduction, the bill now has bipartisan, bicameral support.

“CMSPI has witnessed significant industry efficiencies resulting from debit network competition policies implemented on payment products in the U.S. in 2011. We estimate the impact of debit card routing competition and redundancy at $1 billion in annual savings to merchants – much of which gets passed through to customers given the hypercompetitive nature of the retail industry,” said Callum Godwin, Chief Economist at CMSPI.

CMSPI estimates that competition between credit card networks would conservatively result in $11 billion in annual interchange savings for merchants and consumers reducing credit interchange. If competitive routing on credit had been enacted when Congress began exploring interchange rates and network competition in 2006, $176 billion – or approximately one-third of all credit interchange fees paid by merchant and consumers – could have been saved generating significant pro-competitive efficiencies for U.S. payment services, which have some of the least competitive global rates across the world.


What if Routing Was Extended to Credit Cards?