In 2010, Congress took the first step to address the broken payment card market by including debit reforms in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. This Act required debit networks to actually compete for both bank and merchant routing business, breaking up monopolies.
“H.R. 5983 would be more appropriately named the ‘No-Choice’ act as it eliminates competition in the debit routing market and essentially ensures a return to a monopoly for one player,” said Jennifer Hatcher, chief public policy officer & senior vice president, government relations. “I urge members of Congress and the House Financial Services Committee to stand with Main Street businesses in support of a competitive marketplace and oppose Chairman Hensarling’s legislation. Congress should not waste time attempting to repeal a successful competition-promoting reform when it has an extremely long to-do list of important items awaiting action.”
The 2010 debit reforms finally brought stability, transparency and even competition into the debit routing market. Repealing the successful debit reforms would remove competition and increase merchants’ operating costs; with a 1.5% industry profit margin, any increases will have a direct impact on prices for consumers. The largest card networks should compete with each other and regional players to bring the best value and efficiency to customers, just like Main Street retailers do every day.