COLORADO SPRINGS, Colo. — Lines are being drawn as the battle against credit card swipe fees continues in the nation’s capital. A U.S. Senate bill could alter the landscape of transactions ion Colorado and in turn affect rewards programs.
According to his office, “the Visa-Mastercard duopoly controls over 80 percent of the U.S. credit card network market.” “There's basically a big network that pays your bill right away. So basically, there's an intermediary that covers that cost, and then eventually your credit card company covers the cost, and then you pay the credit card,” Joe Craig, director emeritus of the University of Colorado at Colorado Springs Economic Forum, explained. “And they charge a fee for this service. And they're basically two corporations that do this; Visa and MasterCard.
At the end of March, Visa and Mastercard settled a 20-year legal battle over interchange rates. In the settlement, the companies agreed to cap their swipe fees for five years, pending court approval. In Colorado, 73% of respondents have rewards cards and 70% of Colorado residents “would lose access to points they say helped them book travel they otherwise could not afford.”