Durbin-Marshall Credit Card Mandates could double small businesses’ fraud losses to $20 billion.
The Merchants Payments Coalition (MPC) is back on Capitol Hill pushing another misleading narrative — this time, quixotically, using debit card fraud, which increased after the Durbin Amendment, to push for similar security-jeopardizing mandates on your credit card through the Durbin-Marshall Credit Card Mandates.
You just have to wonder what the logic is in repeating the same failed experiment and expecting different results.
MPC Myth:
The Merchants Payments Coalition oddly cites debit card fraud — which increased after the Durbin Amendment placed routing mandates on Americans’ debit cards — as a reason to impose those same mandates on your credit cards.
Fact:
After the Durbin Amendment forced routing mandates on debit cards, fraud rates rose nearly 60% in the years that followed. By forcing transactions onto multiple networks, the government jeopardized security in the name of making things cheaper for corporate mega-stores. If the same mandates were placed on credit cards, it would similarly jeopardize security by creating new vulnerabilities for criminals to exploit by routing your credit card on unknown, untested networks.
Just as with Durbin debit routing mandates, the lowest-cost network isn’t necessarily the most secure network. When routing decisions are driven by cost rather than security, consumers and businesses are left more exposed to fraud.
Research from Texas A&M economist Korok Ray warns that history would repeat itself at scale, finding the Durbin-Marshall Credit Card Mandates could push fraud losses to nearly $20 billion by 2035, twice the 2021 level.
