Despite record profits, mega-retailers, led by Walmart and Target—as well as other retail titans including Kroger, Home Depot, Lowe’s, and Best Buy—are once again asking Congress to help line their pockets. And once again, consumers will lose big.
The letter sent to Congress on Wednesday from big-box retailers in support of proposed credit card routing mandates demonstrates how the bill is being pushed by WalMart and Target so that they can pocket billions of dollars without passing a dime on to consumers. This is a multi-million dollar lobbying effort to completely upend the credit card payments industry that will ultimately hurt consumers and small businesses.
If this Walmart/Target backed bill is passed, credit cards would be more vulnerable to fraud. Consumers who value and rely on credit card rewards will either lose their benefits or see them hollowed out, with the loss of everything from cash back to airline travel. Millions of consumers will see their credit card costs increase while some could lose access to credit altogether, as the economics that support the current system are upended—just so that Walmart and Target can make even more money.
“Walmart Inc. and Target Corp. are urging U.S. lawmakers to pass legislation that aims to break the hold that Visa Inc. and Mastercard Inc. have over the credit-card market.” LINK
“Large, big-box stores stand to gain the most. Not surprisingly, on Sept. 14, more than 1,700 merchants, including Target and Walmart, sent a letter to Congress in support of the bill.”
“With the Durbin Amendment, the cost-savings went to bottom lines of shareholders and retailers, not consumers, said TPG founder Brian Kelly. This bill would take away rewards from consumers, since credit card companies would no longer have the ability to fund the programs and the perks we’ve all grown accustomed to, taking the value away from consumers and putting it in the pockets of retailers, continued Kelly.”
“This would be disastrous for consumers, especially those who get immense value from rewards and protections on credit cards by allowing retailers to pocket the interchange savings, said Kelly. Consumers would lose out on rewards, purchase protections and fraud protections, while retailers would add to their bottom line.” LINK
“Large retailers such as Macy’s, The Home Depot and Walmart have come out in favor of a proposed bill…”
“There are six to seven platforms, other than Visa and Mastercard, that can process debit transactions. But there are no viable alternatives to Visa and Mastercard when it comes to processing credit transactions, he said. ‘Furthermore, there is no infrastructure ready to support having two optional credit processing networks on credit cards. Bottom line, beyond the political noise, this is impractical,’ Katri said of the proposed legislation.” LINK
CLASH OF THE TITANS — “…Walmart Inc. and Target Corp. are urging U.S. lawmakers to pass legislation that aims to break the hold that Visa Inc. and Mastercard Inc. MA have over the credit-card market. The bill, which Sen. Richard Durbin (D., Ill.) and Sen. Roger Marshall (R., Kan.) introduced in July, would give merchants the right to route many credit-card payments over networks other than Visa and Mastercard.” LINK
“The news: Retail titans Walmart and Target put their clout behind a letter…urging lawmakers to pass a bipartisan bill designed to lower credit card swipe fees, per the Wall Street Journal.” LINK