Electronic Payments Coalition Comments on Interchange Hearing
In a press release, the Electronic Payments Coalition commented on today's hearing before the House Judiciary Committee Antitrust Task Force on H.R. 5546: "The Electronic Payments Coalition is pleased that the House Judiciary Committee Antitrust Task Force is holding a hearing today to take a closer look at H.R. 5546, the "Credit Card Fair Fee Act." Members of the Task Force will be given an opportunity to learn quite explicitly that this ill-conceived legislation is nothing short of price controls -- action that would result in less competition, fewer consumer choices, and reduced access to affordable credit and debit options."
Developed in this country, the global electronic payments system today connects more than 16,600 banks and credit unions to more than 29 million merchant locations accepting more than 1.9 billion cards -- and processes more than 10,000 transactions per second. The success and functionality of this market is evident in the ongoing innovation, improving convenience, new entrants to the marketplace, and the ever-growing presence of credit and debit cards -- which are now being used by more than 90 percent of American households.
We strongly oppose this bill, or any other bill that places price controls on this functioning free market. The legislation's proposed panel of politically-appointed bureaucrats who would "determine rates and fees" for this highly complex and vast system could never replicate the delicate balance currently established by the free market. Such policy would bring harm to consumers, to the community banks and credit unions that receive interchange revenue, and to the viability of the worldwide electronic payments system. Ultimately, merchants would also feel the pain of such an economic disaster -- ironically, the very entities that are seeking price controls for their own financial gain.
In Australia, where regulators forced down interchange fees, price controls resulted in higher cost of credit and fewer benefits for cardholders. Moreover, consumers experienced no corresponding decline in merchandise prices as a result of the caps.
We at the Electronic Payments Coalition are optimistic that Congress, with the testimony provided today, will arrive at the correct and obvious conclusion: that this price control legislation is short on workable substance and fatally flawed.
About Electronic Payments Coalition
The Electronic Payments Coalition is dedicated to protecting consumer value, choice, and competition in electronic payments systems. The coalition is a broad-based group of payment card networks, financial services companies, and financial services trade associations whose primary goal is to educate policy-makers, consumers, and the media about the value of electronic payments systems -- including economic growth, convenience, speed, reliability, and security -- and to ensure the continued growth of global commerce by promoting consumer choice and the stability of the vast payment networks that connect millions of consumers with millions of retailers each and every day.
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