No Innovation in Payments Without Competition
Payments in the United States is long overdue for innovation, but one MPC member recently coauthored an article with the CEO of a stablecoin company that shows how long overdue we are for real change.
Credit card payments use old technology and the Visa/Mastercard duopoly have made moves to stop innovation and competition over and over again.
You don’t have to take our word for it. The Justice Department under each of the past two presidents has reached that conclusion.
- The Trump Justice Department sued Visa for trying to do that (see it here).
- And the Biden Justice Department sued them for doing that in the debit card market (see it here).
The result is that while explosions in cheap computing power should have made payments cheaper and faster, they have been getting much more expensive.
- Just last year, Visa/MC credit card swipe fees jumped from $100 billion to $111 billion.
- And between 2023 and 2024 the average Visa/MC credit card swipe fee rate jumped from 2.26% to 2.35% – not to mention that having the fee set as a percentage means there are more fees collected with every dollar of inflation.
Stablecoin shows promise as a new technology that can bring innovation and efficiencies to the payments system.
But unless something is done to loosen the Visa/Mastercard stranglehold over U.S. payments, we’ll see those dominant players try to take it over, block it, or kill it – and they have been very effective in the past at stifling or co-opting technology that challenges their dominance.
That’s why it is key that the Marshall-Durbin Amendment (i.e. the Credit Card Competition Act) has been paired with the GENIUS Act. Without it, we won’t get the innovation and efficiencies we should.
COMPETITION IS BETTER FOR EVERYONE
IT'S TIME TO PASS THE MARSHALL-DURBIN AMENDMENT