Mandating Competition in Credit Card Processing and Merchant Routing Choice.
This legislation aims to boost competition among credit card processing networks, potentially lowering transaction fees for merchants. It requires large banks to ensure that every credit card can be processed by at least two unaffiliated payment networks, granting merchants the right to choose the cheapest routing option. Additionally, the Federal Reserve will establish a list of networks posing a national security risk, prohibiting their use.
Key points
Large banks (assets over $100 billion) must ensure that every credit card issued can be processed by at least two independent payment networks, ending exclusive network arrangements.
Merchants gain the right to choose which available payment network processes a credit card transaction, aiming to reduce interchange fees (swipe fees).
Issuers and networks are prohibited from imposing penalties or restrictions on merchants for choosing a specific routing network.
The Federal Reserve will create and update a public list of payment networks deemed a national security risk, banning transactions from being routed through them.
Status:
Introduced
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