Debit card swipe fee reform  is the first step in bringing competition to the entire electronic payments market. Because there is not a competitive market for credit card fees; the fees keep going up and despite new technology and the economies of scale that should be driving costs down.

Between two and three dollars out of every $100 that Americans spend when they use a credit card goes to the big banks, Visa and MasterCard even though the Federal Reserve Board has determined it only costs pennies to process credit transactions. This is because the credit card companies collude with their issuing banks to set credit card swipe fees in secret. Banks don’t compete on price, and merchants can’t negotiate the fees. This kind of price-fixing is illegal in other parts of the economy and should be here as well.

NATO is working with its partners in the Merchants Payments Coalition to expand the recent successes on debit card reform to credit cards.