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The Wall Street Journal reports that "lawmakers plan to re-up proposed legislation that would give merchants the power to process many Visa and Mastercard credit cards over different networks.

"The new bill is expected to be introduced as soon as this week with two additional co-sponsors, Sen. Peter Welch, a Vermont Democrat, and Sen. J.D. Vance, an Ohio Republican. 

"A nearly identical bill was introduced last summer by Sen. Dick Durbin, an Illinois Democrat, and Sen. Roger Marshall, a Kansas Republican. That bill was referred to the Senate Banking Committee but didn’t get voted on. Vance, who joined the Senate this year, is a junior member of the committee."

Currently, the Journal explains, "when a consumer pays with a credit card that has Visa or Mastercard listed on it, merchants generally have to route the payment through that network. The bill would mandate that merchants in many cases have the right to route payments through an unaffiliated network.

"That could lower the fees that merchants have to pay."

KC's View:

Lobbyists for Visa and MasterCard no doubt are licking their chops as they anticipate higher fees from their clients, who will be desperate to make sure this legislation goes nowhere.  Their argument, in part, will be that reduced fees will mean less investment in various loyalty schemes, but I think that the opposite argument - that consumers prefer lower prices to promotional programs - is the more compelling one.

But that leads me to what I think is most important about this discussion.  Retailers take the position that higher transaction/interchange fees mean higher prices for shoppers.  I think that sets the bar - and if the legislation gets passed into law, retailers have to pass on at least some of those savings to their shoppers.  If they don't, I think shoppers - and, as much as it pains me to say this, Visa and MasterCard - will have something to complain about.

I do have a sense that this could be the moment for this legislation to pass, though.  One of President Biden's key re-election arguments is that he is more capable than most of achieving bipartisan legislation, and signing this bill into law would be consistent with that narrative.