Prices continue to rise on everything from food to electricity, putting enormous strain on families who have sought relief over the last few years. With many Americans tightening their purse strings, Congress must act soon to alleviate costs. One solution lies in creating a competitive payments market by passing the Credit Card Competition Act (CCCA) to drive down the growing swipe fee expense that burdens every credit card transaction.
The Mountain State’s small businesses, mine included, are the beating heart of West Virginia’s economy. West Virginia is the third most rural state in the union, behind Vermont and Maine, meaning it’s crucial we support the network of family-owned shops, grocery stores, and restaurants that keep those communities afloat. These are the family-owned restaurants and stores, mom and pop shops, local repair services, and other establishments that make our communities what they are. But all of those businesses and the West Virginians that patronize them face higher and higher prices thanks to outrageous credit card swipe fees.
Swipe fees are paid by merchants as a percentage of the total transaction amount to banks and credit card companies every time a card is used at their establishment. Thanks to Visa and Mastercard’s cornering of the payments market, swipe fees have risen to exorbitant levels as they employ a cartel price-fixing scheme, in which they schedule rate increases that the major banks agree to in order to avoid competing with each other. As a result, these two companies now control more than 80 percent of the market share, and, lacking serious competition, have hiked their swipe fees year after year. Over the last decade, the amount of credit card swipe fees collected has nearly tripled, becoming most businesses’ second-highest operating expense after paying their staff. In West Virginia, credit card swipe fees cost our economy more than $400 million in 2024 alone.
What’s worse is the cascading impact of rising costs as merchants are forced to increase prices to account for the additional overhead. The average American family spent around $1,800 last year due to rising prices caused by swipe fees. Pair that with inflation that has been steadily climbing, and West Virginia electricity prices that have risen over 10 percent since 2018, and it’s no wonder Americans are facing an affordability crisis.
But our members of Congress can step in and provide relief by passing the CCCA, which would bring competition to the payments market and keep more money in our local economy. The CCCA would simply allow merchants to choose between a minimum of two different credit card networks when processing transactions, creating the necessary pressure for the card industry’s major players to lower their fees and make their services better. This would not only give other processing networks a fair shot, but it’s estimated to save West Virginia $76 million annually.
The status quo is not working, and as rising prices show no signs of turning around, the CCCA would be a great way to address a worsening financial situation. It creates a level playing field, has bipartisan support from both Democrats and Republicans in Washington, and is favored by the overwhelming majority of American voters. Excessive swipe fees are an ever-increasing burden on West Virginia businesses and the communities we serve. I hope both Sen. Jim Justice and Sen. Shelley Moore Capito back this legislation and make sure it passes soon.
Patrick Lucas is a member of the West Virginia House of Delegates, representing the 24th District in Cabell County. He Chairs the House Agriculture, Commerce, and Tourism Subcommittee.
