Chances of reducing credit card fees..!? Super Benefits..!
When you think of credit card networks, Visa and MasterCard are probably the first brand names that come to mind. To change that, the Credit Card Competition Act of 2022 is created. The legislation, proposed by US Senate Majority Whip Dick Durbin and US senator Roger Marshall, seeks to expand competition in the credit card network market. A network is different than a provider. Credit cards are offered by issuers such as capital One, Chase, and bank of America. And things like MasterCard facilitate the behind-the-scenes elements of transactions, such as routing money securely.
Every time a customer swipes a credit card, that particular merchant pays the credit card issuers and networks. The transfer fee goes to the credit card issuer, and at the same time, the network charges go to that network. Average credit card processing fees range from 1.5 percent to 3.5 percent per transaction. The Credit Card Competition Act seeks to reduce those fees by giving major credit card-issuing banks a choice of at least two networks through which electronic credit transactions can be processed.
Some, including the senators who proposed the legislation, think these lower processing fees will allow businesses to lower the prices of their goods and services, passing the savings on to consumers. While this may seem like a win for everyone, not everyone is convinced. In fact, many business owners worry about potential consequences that could affect credit card security, rewards, and more. If the legislation is passed, merchants will be able to choose which card network to process the transaction. A company with a low ratio may not be very safe. Does this worry you? Cybersecurity of financial transactions is something many people take for granted, and maintaining that security comes at a significant cost. This is very important though. There are a lot of sophisticated hackers trying to break into accounts. Visa and MasterCard can handle it. It cannot be called a startup.