Credit Card Competition Act: Mandating Multiple Processing Networks for Large Banks.
This law requires large credit card issuers (banks with over $100 billion in assets) to enable transactions to be processed over at least two unaffiliated payment networks. The goal is to boost competition and potentially lower the transaction fees (swipe fees) paid by merchants. Merchants will gain the power to choose the cheapest network for routing each transaction, aiming to reduce their operational costs.
Key points
Large card issuers must allow credit card transactions to be processed by a minimum of two competing, non-affiliated payment networks.
Merchants gain the right to choose which available network processes the transaction, aiming to reduce their operational costs.
The Federal Reserve must identify and list payment networks that pose a national security risk, which cannot be used for routing.
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