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Americans Lose When Politicians Choose
Millions of Americans love using their credit cards – the most secure, hassle-free, and worry-free way to pay. Credit cards alert customers to potential fraud, giving them financial safety and peace of mind. They also provide convenient payment options and rewards families use to pay for everyday goods like gas and groceries or trips to see friends and family, all supporting our nation’s economy.
However, some politicians in Washington, D.C. are trying to pass a law jeopardizing the system that works for consumers and small businesses.
The Durbin-Marshall Credit Card Bill would mandate your credit cards can run on alternative networks – not the trusted and stable networks you probably use today – and there is no guarantee the convenience, zero-liability fraud protection, and rewards programs you know will remain. Corporate mega-stores will make more money while you sacrifice your payment convenience, rewards, and peace of mind.
What's at risk?
Rewards
Credit card rewards programs benefit small businesses and American consumers across all income levels. But, the Durbin-Marshall Credit Card Bill would eliminate those programs as we know them so corporate mega-stores like Walmart and Target can line their pockets – leaving your travel points and cashback in the dust.
Data Security
Cyber-attacks against consumers are on the rise, with mega-stores like Target, Home Depot and WaWa falling victim to breaches that expose your information to the worst actors on the dark web. The Durbin-Marshall Credit Card Bill would allow these corporate mega-stores to run your credit card transactions on untested networks, making it easier for cybercriminals to steal your personal financial data.
Access to Credit
Local credit unions and community banks play an essential role in serving small businesses and hardworking families across the country. If the Durbin-Marshall Credit Card Bill were enacted, it would force an overhaul of the payments landscape at a significant systemic cost – a cost ultimately borne by consumers and the local financial institutions that serve them. The legislation solely benefits the largest corporate mega-stores like Walmart and Target and fails to protect vital community-based financial institutions.
Get the Facts about the Durbin-Marshall Credit Card Bill
Corporations Over Consumers.
Senators Durbin (D-IL) and Marshall (R-KS) introduced S. 1838, allowing mega-stores like Walmart and Target to process credit card transactions based solely on what is cheapest for them, disregarding what’s best for consumers.
Less Innovation. Higher Risk.
The Durbin-Marshall Credit Card Bill would shift your credit card purchases to untested, potentially less secure and higher-risk payment networks.
Slash Consumer Rewards.
The Durbin-Marshall Credit Card Bill would eliminate funding for popular credit card rewards programs, impacting 71% of Americans who rely on these benefits for savings.
Impact on U.S. Families.
In 2022, US card rewards totaled roughly $68 billion, aiding families across income levels with expenses like groceries and back-to-school shopping. Credit card routing mandates would erase these valuable credit card rewards programs.
No Savings for Consumers.
They’ve done it before. Back in 2010, Senator Durbin enacted similar mandates on your debit cards and instead of passing those savings along to consumers, the corporate mega-stores pushing for these credit card mandates pocketed the savings. And, your debit card rewards disappeared.
Disregards Consumer Security.
The top reason consumers select a credit card over other forms of payment is security. Credit cards issued by Visa and Mastercard offer zero liability when a transaction on their branded card is processed on their network. Recent studies show that the top reason (79%) consumers choose their credit card is based on data security.
Increases Fraud Risk.
After Senator Durbin passed similar routing mandates for debit cards in 2010, the fraud rate for debit cards increased by NEARLY 60% in subsequent years. A similar outcome for credit cards could cost MORE THAN $6 BILLION in additional fraud and likely require passing much of the bill onto consumers.
The Value of Credit Card Payments
Credit cards are tremendously valuable to small businesses, financial institutions, and consumers alike.
Bolster Consumer Spending & Fuel Economic Growth:
Consumer spending, which has long been the most important factor in U.S. economic growth, continues to be fueled by the innovation of credit cards and other forms of electronic payments. Even during the pandemic, credit cards allowed small businesses to pivot to online sales, curbside pick-up, and in-store self-checkout. Credit cards drive small business growth by:
- Increasing sales
- Broadening the customer base
- Increasing payment channels
- (online & mobile)
- Reducing risk
- Guaranteeing payments
- Improving customer experience
Protect Consumer Data:
As consumer shopping habits continue to shift to mobile and online platforms, advancements in tokenization provide seamless and secure transactions without exposing customers’ sensitive account information. These features protect merchants and consumers by making payment data useless to hackers if it is stolen.
Provide Rewards
People of all incomes take advantage of credit card rewards programs. For many low and middle-income consumers, cashback cards provide a lifeline, empowering them with funds for everyday purchases like groceries and gas. For others, credit card rewards allow them to travel near and far.
The Value of Credit Card Payments to Main Street Businesses
Credit cards empower small businesses and consumers alike. Access to credit cards helps these businesses lower their operating costs and finance major purchases, such as travel, inventory, and accommodations. Rewards programs, such as cashback, give them access to funds they can then use to re-invest in their businesses or give back to their employees. Customers can also take advantage of secure and efficient transactions, including enhanced fraud protections. Credit cards are an essential part of doing business in a modern payment ecosystem and provide key rewards to customers.
SBE Council: The Cost of Cash
The Small Business & Entrepreneurship Council recently published an explainer highlighting the hidden costs paid by small business owners who accept cash instead of electronic payments. The average cost of cash acceptance at a bar or restaurant surpasses 15%. Cash costs can significantly outpace the costs associated with accepting and processing card payments, which also protects consumers from fraud and helps to lift “ticket spend” – the average amount spent by a consumer per transaction – for businesses.
What is Interchange?
Interchange is what merchants pay in order to accept and process credit and debit cards. This amount – about 2% of a credit card purchase – pays for the services credit cards offer, including zero-liability fraud protection, rewards and instant, hassle-free payments. In other words, interchange is essential to our global payments ecosystem. Financial institutions invest interchange revenue into the payment system to ensure continued innovation, efficiency, and safety for customers and businesses alike as well as cover the associated risk of fraud or nonpayment.
Threats
Click on an image to learn more about the culprits behind the Durbin-Marshall Bill
Senator Dick Durbin
Senator Durbin spearheaded the now infamous “Durbin Amendment” in 2010, capping interchange on debit transactions. Thanks to the Durbin Amendment, nearly $145 billion now lines the pockets of corporate megastores. He is back at it with Durbin 2.0, the Durbin-Marshall credit card bill. Senator Durbin is relentless in his pursuit of placing government mandates on credit card routing, playing into the hands of massive retail lobbyists.
US Senator Roger Marshall
Senator Marshall jumped on Durbin’s train in 2023 when he cosponsored his credit card routing legislation. Senator Marshall has since held up passage of critical legislation in the Senate, such as the National Defense Authorization Act, to attempt to force a vote on the deeply flawed credit card bill.
Target
Major retail chains, including Target, spend millions of dollars every year in campaign contributions and lobbying efforts to advance harmful credit card routing legislation that would increase their bottom lines.
Walmart
Major retail chains, including Walmart, spend millions of dollars every year in campaign contributions and lobbying efforts to advance harmful credit card routing legislation that would increase their bottom lines.
Home Depot
Major retail chains, including Home Depot, spend millions of dollars every year in campaign contributions and lobbying efforts to advance harmful credit card routing legislation that would increase their bottom lines.
Consumer Financial Protection Bureau (CFPB) & Department of Transportation (DOT)
The Consumer Financial Protection Bureau (CFPB) and the Department of Transportation (DOT) held a joint hearing on credit card and airline reward programs, requested by Senators Roger Marshall (R-Kan.) and Dick Durbin (D-Ill.) to weaponize the federal government against American companies opposing the Senators’ proposed credit card mandates.