The premise of the legislation is simple: It provides businesses with a second routing option to process credit card payments. Currently, businesses have no choice but to pay the fees set by Visa or other networks.
This legislation is not only essential for the financial health of small businesses, which have had to cover swipe fee increases of overin the last year alone, but also for the economy as a whole. By reducing the cost of credit card processing, businesses can lower costs for consumers, and they can also reinvest those savings into their operations, creating new jobs, and driving economic growth.
By providing businesses with at least two routing options to process credit card transactions, Visa and Mastercard will finally be forced to compete with smaller networks and lower their swipe fees to more competitive rates. Otherwise, retailers will choose a different network.that “the proposed Act would prohibit networks that have affiliated companies with the credit card issuer from processing the transaction.” This is just flat-out wrong.
But the truth is the CCCA would benefit these smaller financial institutions. Credit Unions, just like merchants, should have the ability to work with more than one network on their cards and use that bargaining power to get the best deal possible.
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