Mastercard has sent a letter to several members of the United States Congress stating its disagreement with the provisions of the Credit Card Competition Act.
In the official message of the payment giant, which was made public on Friday, September 22, it is claimed that the mentioned law will cause consumers to have no choice. The company’s representatives also insist that this initiative will have a negative impact on security in the industry. Another argument of the payment giant against the law is the assertion that the juridical decision of the authorities will become a barrier for small businesses, limiting their ability to invest in their future. Separately, the company notes that this initiative will eliminate rewards.
The Credit Card Competition Act, as reported by the media in the summer, stipulates that financial institutions must allow consumers to make payment transactions through at least one network that competes with Mastercard and Visa.
Supporters of the law say that the new regulatory framework will provide sellers with an expanded choice. According to them, merchants will have the opportunity to use payment networks, interaction with which provides lower fees, including exchange fees, than Mastercard and Visa. Currently, the share of these giants of the financial services industry in the credit card market is 80%.
Supporters of the law also claim that sellers will transfer the funds saved as a result of the opportunity to interact with an expanded number of payment platforms to consumers. This is a controversial opinion because in this case, merchants will act to the detriment of their commercial interests. At the same time, it is impossible to exclude the possibility that sellers’ customers will spend less money when buying goods due to the use of payment platforms with lower fees.
Mastercard also insists in its letter that the current competitiveness of the payment industry is the maximum for all the years of the existence of this area. The company notes that ordinary consumers and businesses can use cash, checks, global and regional networks, BNPL, person-to-person and account-to-account services, real-time financial platforms, digital currencies, virtual wallets, and open banking firms. With this enumeration of payment methods that American consumers can use, Mastercard states that there is a wide choice that provides a high level of competition.
Also in its letter, the company stated that the law could deprive consumers of access to the benefits of using electronic payments, such as lending solutions, floating transactions, zero liability, remuneration, and fraud protection. Mastercard notes that regulation will increase costs, which will reduce what can be described as customer benefits.
The company in its letter focuses on the fact that businesses also benefit from electronic payments, which is expressed in increased sales, guaranteed payments, and operational savings.
Mastercard’s appeal was addressed to seven legislators who last week called for competition in the area of payment transaction services and accused this brand and Visa of rigid market practices and duopolistic control.
As we have reported earlier, UAE Partners With Mastercard to Accelerate AI Adoption.