Keeping an eye on Credit Cards in Congress

In July 2022, the Senate introduced a bill called the “Credit Card Competition Act of 2022”, sponsored by Senators Dick Durbin [D- IL] and Roger Marshall (R-KS). As its name suggests, the bill proposes to increase competition in credit card processing, and in turn, allow merchants and consumers to benefit from reduced credit card swipe fees. While the bill did not make it to the floor of either the Senate or House for vote in 2022, it is expected that the bill will be reintroduced in 2023.

Jim DuBoyce, Managing Director of Payments at W. Capra Consulting Group, shared, “Should this bill pass, there will be available savings on credit card fees from the forced competition, but this will also require significant planning. Adding additional routing options for credit cards is not as easy as just toggling a switch and saying, ‘route this to whatever is cheapest for me, please, Point-of-Sale’.  In many ways this effort will resemble the road to EMV enablement of PIN debit, with the multitude of decisions related to testing and certification, routing, backend settlement and reconciliation.”

CCCA of 2022 Summary

The goal of the Credit Card Competition Act (CCCA) is to remove restrictions in the routing of credit card transactions for large issuers, thereby increasing routing competition and lowering the processing cost for merchants and consumers. Key provisions include:

  • Requires the Federal Reserve to prescribe regulations and rules for implementing the CCCA within 1 year of enactment of the CCCA.  The regulations/rules would take effect 180 days after the Fed publishes the final regulations.
  • Prohibits a “covered card issuer” or payment network from limiting the routing options for credit cards to 1 payment network; 2 or more affiliated payment networks; or the 2 largest payment networks as measured by cards issued in the US. A covered card issuer is defined as a credit card issuer with $100 billion or more in assets.
  • Exempts credit cards issued in “3 party payment system” model.  This would presumably apply to American Express and Discover. 
  • Prohibits networks and issuers from restricting routing based on “authentication, tokenization, and security technology” rules for the covered cards.

When and how to consider?

As this is still just a bill introduced in the Senate, merchants don’t need to start a project just yet. DuBoyce added, “This will be an important bill for merchants to keep an eye on in 2023 – if the bill passes and you have an upcoming technology refresh or are considering changes to your payment acceptance process, it would be prudent to integrate alternate credit card routing into your scope and determine the savings.  Along with that, there will be an entire program to decide how this will be implemented, incorporating guidance from industry governing bodies.”  

Seems complicated – where do I get started?

At W. Capra, we work tirelessly to remain at the forefront of retail technology, facilitating payment acceptance and cost optimization.  We have helped myriad clients implement customized EMV solutions, optimize their debit routing, cost of acceptance, and ensure that their processes are well thought out and operationally viable.  DuBoyce elaborated, “Working with W. Capra on these complex, multi-faceted programs will give your organization access to our wealth and depth of experience in the arena.  We have the ability to ask the right questions and push to get programs in place that work for merchants.”  

Jim DuBoyce cares deeply about leading W. Capra clients in reducing their cost of payment acceptance and corresponding impacts. For further discussion, contact Jim DuBoyce at jduboyce@wcapra.com.