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  • Writer's pictureVeronica Irwin

The credit card version of the Durbin amendment is coming

A bill targeting card fees could have big implications for fintech.


Sens. Dick Durbin and Roger Marshall will propose a bill as early as this week targeting credit card fees, the Wall Street Journal reports. The proposed legislation would be similar to the 2011 Durbin amendment, which capped fees debit card processing companies could charge.

According to the sources who spoke to the Journal, the bill would permit merchants to transact through different networks beyond Visa and Mastercard, a duopoly that controls most of the credit card market. Currently, when a customer uses one of the two companies’ cards, the payment must be processed through the corresponding branded network, which critics say allows the companies to charge high fees without much competition.

In a Senate Judiciary Committee hearing in May, credit card executives said the industry faces increased competition from digital wallets, "buy now, pay later" providers and cryptocurrency. “Regulatory interventions focused exclusively on card networks would shift consumer spending away from networks like Visa, and toward more expensive payment methods with more risk, less reliability and fewer protections and security,” Bill Sheedy, senior adviser to Visa CEO Al Kelly, said at the time.

The bill could have impacts far beyond the pockets of Visa and Mastercard, however. Many fintechs in the business of offering white-labeled credit cards, from corporate spend companies to neobanks, profit from interchange fees. Though the proposed bill targets credit card networks and cards issued by the largest banks, increased competition will likely bring fees down over time, potentially slashing profits.

The new bill would amend the 1978 Electronic Fund Transfer Act, which established consumer rights in electronic payments including charge cards, ACH, ATMs and automatic bank withdrawals. Amendments would need to pass through the Senate Banking Committee, of which neither Sen. Durbin nor Marshall is a member.

Representatives from Visa and Mastercard did not respond immediately to requests for comment, nor did the offices of Sens. Durbin and Marshall.

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