OPINION: Credit Card Competition Act would lower fees for small businesses

From tariffs to rising prices on goods and services, no one has been left untouched by economic uncertainty, especially those in tribal communities. Fortunately, with legislation like the Credit Card Competition Act, lawmakers have the opportunity to ease some of these concerns by passing the bill and finally tackling excessive credit card swipe fees.

Charged as a percentage of a total transaction amount, swipe fees paid by merchants have grown 70% since the pandemic. This puts enormous strain on the budgets of small businesses, especially those on tribal lands. More revenue siphoned away in swipe fees often forces business owners to raise prices to cover the additional overhead.

But it isn’t only businesses who suffer. Consumers share in the financial burden, too. The average American family spends nearly $1,200 a year in higher prices caused by swipe fees. For tribal communities the devastation of these fees is amplified as the poverty rate for American Indians is over 30%, nearly double New Mexico’s average. Whether a customer pays with a credit card or not, everyone suffers the added expense created by swipe fees. Which means those who are underbanked and unable to cash in on premium credit card rewards end up subsidizing the benefits of those who can.

Unfortunately, this will not change unless Congress passes the credit card bill, allowing merchants to choose between at least two networks when processing a transaction. This is because the Visa/Mastercard duopoly, which has consolidated more than 80% of the market share, refuses to stop increasing swipe fees. Despite the fact their net profit margin soars north of 45%, and that swipe fees earned by Visa and Mastercard totaled more than $111 billion dollars last year, it never seems to be enough.

It’s likely the reason why the Credit Card Competition Act has bipartisan support from a wide range of stakeholders like the Coalition of Large Tribes representing over 50 individual tribes including New Mexico’s Navajo Nation and Ute Mountain Ute Tribe.

Navigating this economy is hard enough without swipe fees weighing down every single transaction. I hope New Mexico Sens. Martin Heinrich and Ben Ray Luján will continue to support tribal communities and uplift our economic enterprises by passing the Credit Card Competition Act. It’s clear credit card swipe fees continue to disproportionately impact our people, and we simply can’t allow it any longer.