A letter to the editor penned by League President and CEO Scott Sullivan and published in the Omaha World Herald on June 23rd points out that interchange is the cost of keeping consumers’ data safe.
The editorial was sent in response to the introduction of the Credit Card Competition Act of 2023 (CCCA) – S.1838/H.R. 3881.
Read the Letter to the Editor HERE.
The reasons for interchange was to provide resources for a safe and convenient payment system for consumers while providing guaranteed payment to merchants. This has paid off for merchants, with significant growth in the number of credit card purchases. Merchant payments were more than $9 trillion in purchase volume in the U.S. in 2019. In 2020, that figure grew by 24%.
However, fraud is growing at a faster pace than consumer spending. Growth in “card not present” transactions – with more people buying goods and services online or over the phone – has led to billions in losses.
In one year, from 2020 to 2021, total fraud volume increased 18%. In 2021, fraud losses of nearly $12 billion were associated with total card volume of more than $11 trillion in the United States.
Defending against fraud requires investment in data security and fraud protection. However, retailers refuse to invest in the necessary technology and processes to prevent such losses.
Rather than trying to prevent fraud, merchants would rather convince lawmakers to pass legislation reducing their interchange costs.
The bottom line is interchange works. This fraction of a cent keeps credit available to consumers, while protecting them- and merchants – from fraud.
During the August recess, the League is urging credit unions to contact their Nebraska lawmakers and tell them to protect your card. Grassroots Action Center (cuna.org)
