Op-Ed: Michael Lazzara Jr,: The Swipe Fee Problem North Carolina’s Senators Can Solve
by: Michael Lazzara Jr
In the last year, more people have moved to North Carolina than any other state in the country. Boasting a net gain of 84,000 new residents, families are flocking to North Carolina because the state still offers something that’s becoming increasingly harder to find: a place where a paycheck goes further. That affordability edge is what’s at stake here in a costly fight that’s draining small businesses every day.
Enter credit card swipe fees. A percentage fee charged to businesses after every individual card transaction, swipe fees have become a notorious plague on both merchants and the customers they service. Visa and Mastercard command more than 80% of the market, and they use that control to impose swipe fees with no opposition. In fact, major banks prefer to accept fee hikes to avoid competing with each other and to maximize their own profit on swipe fees. As a result, many businesses are forced to bake those fees into their products, running up the price of food, gas, and other necessities as there are few things you can’t pay for with a card anymore. Swipe fees have reached a record $198 billion this year, sucking money out of our local communities and into the pockets of the massive banks and card networks whose profit margins continue to widen.
The Credit Card Competition Act (CCCA) is the answer to correcting the structural problems that have allowed this duopoly to develop. Under the CCCA major financial institutions would need to enable at least one other card network alongside Visa or Mastercard when processing card transactions, finally giving business owners a choice. Competition is a core component of our economic system, and when unleashed by the CCCA it would help to drive down swipe fee rates and improve services as networks continue striving to be the preferred card network. For North Carolina, that competition would save businesses and consumers over half a billion dollars a year.
The CCCA is a bill that spans the political spectrum, garnering support from Senators Bernie Moreno, Cynthia Lummis, and Angus King just last month alongside President Trump’s repeated endorsements. Our own Senator Thom Tillis sits with Senator Moreno on the Senate Banking Committee, the entity with direct jurisdiction over this bill. As Tillis heads into his final months representing North Carolina, he has a golden opportunity to deliver once more for his constituents struggling under the weight of ever-increasing financial pressure.
Senator Ted Budd has also been a strong advocate in Washington for small business growth and Main Street. The CCCA would be the perfect legislation to further reaffirm his reputation and commitment.
With President Trump's visit to North Carolina putting a national spotlight on the state, there's no better moment for Tillis and Budd to show they're aligned with the White House on an issue that's squarely in their constituents' interest.
Neither senator has to reinvent the wheel here or take an ideological leap to support the CCCA. They simply have to apply what conservatives have long understood, which is that competitive markets lead to lower prices and better service for consumers. The CCCA is the chance for both senators to put principle into practice and put money back into the hands of the North Carolinians who work every day for it.
Americans are choosing North Carolina because North Carolina is still choosing them. Cosponsoring the CCCA is a chance for Senators Tillis and Budd to keep it that way.
