The Durbin-Marshall credit card bill was introduced last year in Congress as the “Credit Card Competition Act” (CCCA), and the bill’s sponsors are pushing for a vote this fall. The proposed legislation is a direct threat to the electronic payments and rewards system and would have a major negative impact on small business owners who use credit cards and rewards to support their businesses. Despite its name, the legislation would circumvent the competitive market with a new government routing mandate that would dictate processing networks, without regard to security or quality.

New data from the Small Business Payments Alliance once again reaffirms the value of credit cards for small businesses. According to consumer surveys and research gathered over the first quarter of 2024, credit cards continue to provide crucial benefits to small businesses.

This research note finds the proposed Credit Card Competition Act (CCCA) will likely generate between $13 billion and $15 billion in transfers to merchants from financial institutions and consumers. However, this distributional analysis finds almost all of those savings will accrue to retailers with $500 million in sales or more—none of which constitute small businesses under the Small Business Administration’s (SBA) definition.

The Holiday Season is in full swing and as consumer spending rises, so too do fraud attempts. According to a 2022 study by AARP, three out of four U.S. adults age 18-plus have been targeted by or experienced at least one form of fraud. Fortunately, more and more consumers and merchants are using credit cards to protect themselves against financial losses.

When a consumer makes a payment with a credit card, a small portion of the transaction is used to compensate the merchant’s bank, the payment processors, the payment network, and the consumer’s bank—each of which play a role in facilitating the transaction.

Small Business Saturday is an annual shopping event that takes place on the Saturday following Thanksgiving. Since 2010, the initiative has encouraged consumers to support local small businesses. The idea draws a stark contrast to Black Friday and Cyber Monday – two other big holiday shopping days that are dominated by mega corporations.

The “Durbin Amendment, enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has been cited by some as an example of a policy that did not achieve the goals of the authors of the policy while imposing new costs on the financial and debit exchange sectors.

Credit Union National Association and American Association of Credit Union Leagues commissioned this report from Cornerstone Advisors in spring 2023 to examine the evidence of how debit card routing mandates and debit interchange price caps from Senate Amendment 3989 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Durbin Amendment” or “Durbin 1.0”) have impacted credit unions and the larger banking system.

Credit card rewards programs are expensive and intricate for issuers to maintain, but they are also enormously popular with cardholders and a significant driver of customer acquisition. This Javelin Strategy & Research report looks at the current landscape for rewards programs, including possible responses by the industry should Congress pass the Credit Card Competition Act.

The Small Business Entrepreneurship Council (SBE Council) strongly opposes harmful credit card routing legislation introduced this year in the U.S. Senate (S. 4674) and U.S. House (H.R. 8874). If enacted, credit card routing mandates would be burdensome for small businesses.