Are Visa and Mastercard operating a monopoly on credit cards? That’s the accusation from U.S. Sen. Josh Hawley, R-Missouri.
During a Senate committee hearing in Washington Tuesday, Hawley grilled executives from both credit card companies, accusing them of levying exorbitant user fees — also called swipe fees — onto small business owners that accept Visa and Mastercard while giving giant retailers discounts.
“You are able to give the shaft to small businesses. Estimated cost to Missouri businesses from these fees is one and a half billion dollars – that’s with a B – billion dollars a year, a year,” Hawley said. “Why aren’t all of these businesses running away from this model? Because they don’t have a choice, because you control so much of the market.”
Hawley said Visa and Mastercard control 80% of the credit card market in the United States.
“You have a business model; you’re making over 50% profit margin. You have 80% of the market, but you don’t want any more competition,” he said. “It’s unbelievable what you’re charging small businesses and consumers, and yet your testimony is, ‘please, please, please, please, please – we can’t possibly have any competition.’”
In response, Bill Sheedy, senior advisor to Visa Inc.’s CEO, testified that they care very much about small businesses.
“We like competition very much,” Sheedy said. “I will say, as it relates to small business, we care very much, and the pandemic was difficult on small business more than anyone. In 2022, we lowered rates for 90% of small businesses in the United States.”
As for giant retailers getting breaks on user fees, Sheedy cited Walmart as an example, saying it’s not unreasonable for a high-volume merchant to qualify for lower rates.
Hawley, meanwhile, wants Congress to pass legislation that would cap interest rates on credit card fees.
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