President Donald Trump took another jab at credit card swipe fees during a speech Wednesday at the Republican midterm convention in Dallas.
The president pledged to reduce the fees associated with credit card transactions to save the average American family $1,200 annually, though he didn’t say how that would be accomplished. He also didn’t mention that merchants pay those transaction fees and it’s up to them whether any savings are passed to consumers.
“We’ll cut out-of-control credit card swipe fees,” Trump said during the speech, contending that the fees are “seven to eight times” higher than the fees paid in other countries. “We’ll straighten it out very quickly.”
It was one of many promises the Republican president made during his speech as he seeks to buttress Republican candidates for the midterm elections. The House and Senate seats that are up for grabs during the election could shift the balance of power in Congress to the Democrats and against Trump if that party wins a majority in the two houses.
The president has previously backed the Credit Card Competition Act, which would require banks that issue credit cards to inject more competition into how such transactions are processed. Currently, the two biggest U.S. card networks, Visa and its smaller rival Mastercard, dominate the processing, but the proposal would require a third network be available to merchants for processing card purchases.
Retailers, restaurateurs and other merchants have long complained about card fees that they must pay when consumers swipe credit cards to pay for goods and services. They’ve battled for years to help move forward legislation to cut the fees, including decades ago with the Durbin Amendment.
Most recently their trade groups have backed the bipartisan CCCA legislation, proposed by the Republican Sen. Roger Marshall and retiring Democrat Sen. Dick Durbin. Trump has previously praised Marshall for the legislation, and has backed the senator as he faces a re-election fight against a United Methodist pastor in Kansas.
The Merchants Payments Coalition, which supports the legislation, noted in a press release Wednesday that it was the third time this year that Trump has egged on credit card fee reform to lower the cost of such transactions.
“President Trump is right that dealing with credit card swipe fees would be one of the most effective ways to help American families,” MPC Executive Committee member Doug Kantor said in the release. “Credit card swipe fees drive up costs for small businesses and prices for American families every day,” said Kantor, who is also the general counsel for the National Association of Convenience Stores.
The legislation gained three more supporters in the Senate last month, including Sens. Bernie Moreno (R-OH), and Cynthia Lummis (R-WY) and Sen. Angus King, an independent from Maine. In the House, key sponsors of the legislation are Reps. Lance Gooden (R-TX) and Zoe Lofgren (D-CA).
Nonetheless, the banks and credit card companies have mounted a fierce fight against the legislation and have managed to fend it off for years, including successfully keeping it from being attached to other major pieces of legislation.
The Electronic Payments Coalition, which includes bank, credit union and card network members, argues that merchants have significantly increased their revenue over the past decade by way of credit cards while the fees have remained relatively flat.
“Supporters of the Durbin-Marshall credit card mandates have spent years building their case on cherry-picked statistics, half truths and numbers stripped of critical context,” that group said in a press release earlier this month.