Let’s talk about the “elephant in the economy.” Every credit card swipe and online checkout carries a quiet but punishing reality for small businesses: credit card processing fees. Within the United States, these fees range from 2 to 4 percent per transaction. That may not sound like much, but it’s a major hit to a small business’s bottom line. It’s almost a privately levied tax — one that businesses didn’t vote for, can’t deduct, and can’t reasonably opt out of.
G-Allen - monopolies are supposed to illegal, DOJ in 2024: Visa wields its dominance, enormous scale, and centrality to the debit ecosystem to impose a web of exclusionary agreements on merchants and banks,” “These agreements penalize Visa’s customers who route transactions to a different debit network or alternative payment system.”
Furthermore, when faced with threats, Visa “engaged in a deliberate and reinforcing course of conduct to cut off competition and prevent rivals from gaining the scale, share, and data necessary to compete.
Visa also tamped down innovation, according to the DOJ. Visa pays competitors hundreds of millions of dollars annually “to blunt the risk as they develop innovative new technologies that could advance the industry but would otherwise threaten Visa’s monopoly profits,” according to the complaint.
Visa has agreements with tech players including Apple
, PayPal
and Square
, turning them from potential rivals to partners in a way that hurts the public
DOJ 2025 will most likely help the big money Visa and Mastercard.
Very clear the Trump DOJ is not on the side of the people, only big money.
I agree that in general, monopolies are illegal. But some monopolies are allowed by law. For example, patents and trademarks help de facto monopolies, and there are entities like Major League Baseball which expressly allow them to be monopolies.
I have no doubt that VISA and MC are de facto monopolies. I do not know if there are laws that permit this, and if there are, they should probably be dismantled because obviously these entities are enriching themselves because of it.
All I'm pointing out is that we need to fix the underlying problem and not create another level of government bureaucracy when the underlying problem will be solved if we remove whatever it is that is allowing this monopoly to occur.
Capping fees and leaving the monopoly in place is not a good long-term solution.
Credit card fees are indeed too high. But the "free market" allows consumers the choice of whether or not to use a card, and merchants the choice whether or not to accept a card. There are other alternatives, namely checks and cash.
But there is a legitimate solution here, other than an unconstitutional limit on fees that two willing parties (the merchant and the card issuer) have agreed upon. And that is to remove restrictions that give an effective monopoly to Mastercard and Visa.
Any large bank should be able to operate a similar network and real competition will lower fees. That's how things work in our system, not by government decree (price caps).
While the government definitely wants to limit fraud and abuse, technology has progressed to the point that other large players could create cards and charge systems that allow VISA and MC to be bypassed. Think about all the payment Apps that are now available. How about those be expanded for use by small and large businesses? I would bet anyone that the two big credit card companies would quickly lower fees when real competition is introduced.
It may have made sense long ago to give Visa and Mastercard a de facto monopoly but that is no longer necessary.
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G-Allen - monopolies are supposed to illegal, DOJ in 2024: Visa wields its dominance, enormous scale, and centrality to the debit ecosystem to impose a web of exclusionary agreements on merchants and banks,” “These agreements penalize Visa’s customers who route transactions to a different debit network or alternative payment system.”
Furthermore, when faced with threats, Visa “engaged in a deliberate and reinforcing course of conduct to cut off competition and prevent rivals from gaining the scale, share, and data necessary to compete.
Visa also tamped down innovation, according to the DOJ. Visa pays competitors hundreds of millions of dollars annually “to blunt the risk as they develop innovative new technologies that could advance the industry but would otherwise threaten Visa’s monopoly profits,” according to the complaint.
Visa has agreements with tech players including Apple
, PayPal
and Square
, turning them from potential rivals to partners in a way that hurts the public
DOJ 2025 will most likely help the big money Visa and Mastercard.
Very clear the Trump DOJ is not on the side of the people, only big money.
I agree that in general, monopolies are illegal. But some monopolies are allowed by law. For example, patents and trademarks help de facto monopolies, and there are entities like Major League Baseball which expressly allow them to be monopolies.
I have no doubt that VISA and MC are de facto monopolies. I do not know if there are laws that permit this, and if there are, they should probably be dismantled because obviously these entities are enriching themselves because of it.
All I'm pointing out is that we need to fix the underlying problem and not create another level of government bureaucracy when the underlying problem will be solved if we remove whatever it is that is allowing this monopoly to occur.
Capping fees and leaving the monopoly in place is not a good long-term solution.
Credit card fees are indeed too high. But the "free market" allows consumers the choice of whether or not to use a card, and merchants the choice whether or not to accept a card. There are other alternatives, namely checks and cash.
But there is a legitimate solution here, other than an unconstitutional limit on fees that two willing parties (the merchant and the card issuer) have agreed upon. And that is to remove restrictions that give an effective monopoly to Mastercard and Visa.
Any large bank should be able to operate a similar network and real competition will lower fees. That's how things work in our system, not by government decree (price caps).
While the government definitely wants to limit fraud and abuse, technology has progressed to the point that other large players could create cards and charge systems that allow VISA and MC to be bypassed. Think about all the payment Apps that are now available. How about those be expanded for use by small and large businesses? I would bet anyone that the two big credit card companies would quickly lower fees when real competition is introduced.
It may have made sense long ago to give Visa and Mastercard a de facto monopoly but that is no longer necessary.
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Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.