Keep credit card swipe fees competitive

The Denver Post

Dec. 28, 2016

By Christopher Howes and Grier W. Bailey

Six years ago, Congress gave every consumer in the country, including Coloradans, a break.

Until then, banks had been piling gigantic processing fees onto merchants every time a customer swiped the banks’ debit card to pay for something, from lunch to tires to groceries and haircuts.

Just two huge credit-card companies, Visa and MasterCard, dominate this market and have the power to price-fix these “swipe fees” at outrageous levels.

Over the years, this business became a distorted version of the competitive free-market system that made our economy the largest in the world.

Instead, the swipe-fee market reverted back to the days of the great railroad and steel trusts and the robber barons of more than a hundred years ago.

Six years ago Congress stepped in with legislation to restore competition and fairness to the market and help consumers and small-business people.

For instance, Visa and MasterCard had paid their member banks to block other companies from processing debit transactions for merchants.

Read the full story here.