US lawmaker behind the original “Durbin Amendment” says latest settlement offers only “temporary concessions” and renews push for the Credit Card Competition Act.
US Senator Dick Durbin has dismissed Visa and Mastercard’s latest proposed settlement with US merchants over credit card “swipe fees”, arguing the deal fails to deliver meaningful, long-term relief for retailers or consumers.
Responding to reports of a revised settlement which would trim US credit card interchange by around 0.1 percentage points over five years, Durbin said the agreement “falls short” and characterised it as offering only “temporary concessions and the ability for Visa and Mastercard to change the rules as they go”.
He reiterated his call for Congress to pass the Credit Card Competition Act, saying only legislation to inject genuine network competition can tackle what he described as “outrageous swipe fees” that “are crushing small businesses and costing American families an extra $1,200 each year”.
Who is Dick Durbin?
Durbin, a Democrat from Illinois, is the Senate’s Majority Whip and the ranking member of the powerful Senate Judiciary Committee. He is also one of the longest-standing critics of card fees in Washington.
He authored the original Durbin Amendment to the 2010 Dodd–Frank Act, which capped debit card interchange for large US banks and forced issuers to enable at least two unaffiliated payment networks on debit cards. That reform reshaped the economics of US debit acceptance and remains deeply contentious among card issuers and networks.
The Credit Card Competition Act effectively seeks to extend that model into credit. Co-sponsored with Republican Senator Roger Marshall, the bill would require the largest credit card issuing banks to enable at least two unaffiliated networks for processing each credit transaction, preventing Visa and Mastercard from jointly occupying both routing options on the same card.
Supporters, including major merchant and retail trade groups, argue that this would break the Visa–Mastercard duopoly and create routing competition similar to that seen in debit, forcing fees down over time. One industry estimate cited by Durbin suggests the measure could save merchants and consumers around $17bn a year.
What is in the new Visa/Mastercard settlement?
The fresh settlement proposal is designed to resolve a class action that has been running since 2005, in which US merchants accuse Visa and Mastercard of unlawfully inflating interchange and enforcing anti-competitive rules such as “honour-all-cards”.
Key elements of the revised deal, according to court filings and public reports, include:
- Headline fee cut: Average U.S. credit card interchange, typically around 2–2.5% of the transaction value, would be reduced by roughly 0.1 percentage points for five years.
- Category choice: Merchants would gain more flexibility over which types of cards they accept, with categories such as standard consumer, premium/rewards, and commercial cards treated differently.
- Caps on standard cards: Interchange on standard consumer credit cards would be capped for an extended period (reports suggest up to eight years) at a rate significantly below current averages.
- Rule changes: Visa and Mastercard would adjust certain network rules that have previously limited merchant steering and surcharging practices.
The total value of the deal has been widely reported at around $38bn, combining prospective fee reductions with other relief over the settlement period.
For context, US merchant credit card fees totalled about $101bn in 2023, with Visa and Mastercard together accounting for roughly 84% of general-purpose credit cards in circulation, according to figures highlighted in Durbin’s statement.
Why Durbin – and merchants – say it is not enough
Durbin’s core criticism is that the settlement tweaks the current system at the margins without altering the market structure that enables high fees.
In his statement, he argued that “reducing the cost of swipe fees and allowing merchants more choice in which cards they accept should be welcome news”, but concluded that the settlement “provides only temporary concessions” and lets the networks “change the rules as they go”.
That scepticism is mirrored by several merchant groups. The National Retail Federation and the Merchants Payments Coalition have already criticised the compromise as offering modest, time-limited relief while leaving Visa and Mastercard’s core pricing power largely intact.
