A recent report from consumer watchdog Accountable.US accuses finance behemoths Visa and Mastercard of maintaining a duopoly that stifles competition in the U.S. debit and credit card payment markets. The report, viewed by Cointelegraph, claims these two companies have spent over $80 million on lobbying efforts to block legislation that could open the door to competitors.
Lobbying For Dominance
Visa and Mastercard process the majority of U.S. credit and debit card transactions, which has given them significant control over the payment industry. According to the report, this dominant position has allowed the companies to drive up fees for both consumers and businesses, with Accountable.US pointing to “sky-high” swipe fees as a direct result of this duopoly.
Liz Zelnick, director of Accountable.US’ economic security and corporate power program, expressed concerns about the impact on American families. “Visa, Mastercard, and their army of corporate lobbyists have spent millions to try and convince Congress that increased competition is a bad thing for consumers,” Zelnick stated. She added that this duopoly’s grip on the market has inflated the cost of everyday essentials such as gas and groceries, which hurts even cash-paying customers indirectly.
DOJ Antitrust Suit – A Spotlight on Visa
The U.S. Department of Justice (DOJ) recently filed an antitrust lawsuit against Visa, accusing the company of using its power to dissuade institutions from working with rival payment service providers. The Accountable.US report uses this lawsuit to emphasize the need for congressional action. Zelnick argued that the Visa-Mastercard duopoly has become an obstacle to fair competition, and without intervention, U.S. consumers will continue to pay the price.
“This lawsuit is a reminder why Congress must act to give federal regulators more tools to ensure a fairer marketplace,” Zelnick said, adding that legislation such as the Credit Card Competition Act is critical to bringing about meaningful change.
The Credit Card Competition Act
The Credit Card Competition Act of 2023, introduced by Senators Dick Durbin (D-IL) and Lance Gooden (R-TX), aims to break the Visa-Mastercard stronghold by introducing more competition into the payment sector. J.D. Vance, a Republican vice-presidential candidate, has also endorsed the legislation. If passed, the Act would open the door for new players in the industry, potentially reducing the fees consumers and businesses pay for card transactions.
Also Read: Visa Defends Market Share With $12.36 Billion Tokenized Assets Platform Amid DOJ Legal Battle
Despite bipartisan support, the Senate has not yet scheduled a discussion or vote on the bill. As pressure mounts from watchdog groups like Accountable.US and as lawsuits like the DOJ’s proceed, eyes are now on Congress to see whether Visa and Mastercard’s reign over the payments market will finally be challenged.
The report by Accountable.US has put a spotlight on Visa and Mastercard’s alleged anti-competitive behavior and their influence over U.S. payment processing. With growing calls for legislation like the Credit Card Competition Act, lawmakers may soon be forced to reckon with the implications of this duopoly on everyday consumers. Whether or not change is on the horizon depends on the actions of Congress—and whether the public demands accountability from the financial giants running the show.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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