The Merchants Payment Coalition says passage of the Credit Card Competition Act would add a layer of safeguarding, keeping China from “infiltrating” the Payments processing industry in the US.
A letter was written by representatives of the organization to a House committee that was holding a hearing on Chinese economic threats in February. 7.
“MPC has grave concerns over the level of involvement that China has in our nation’s payment system,” the organization said in a letter to the House Financial Services Committee. “Preventing China from infiltrating the U.S. payments system is one of our top priorities.”
“Currently, there is no federal law that prevents any financial institution from doing business with China UnionPay to process payments on its credit cards,” the letter continued. “The Credit Card Competition Act, if it were to become law, would specifically prohibit card networks, such as China UnionPay, from operating in the United States because they pose a threat to the country’s national security. market. This important law’s clause would greatly advance our interests in national security.”
The letter was delivered to Chairman Patrick McHenry, a Republican from North Carolina.; Maxine Waters, a ranking Californian Democrat,; and other committee members as the panel prepared to hold a hearing on “dealing with China’s economic threat”
The letter referred to China UnionPay’s participation in the EMVCo and Payment Card Industry Security Standards Council, the two organizations that determine security standards for the United States. credit and debit card system. American Express, Discover, Visa, and Mastercard jointly control the two organizations, but UnionPay joined EMVco’s governing body in 2013 and has been a PCI council member since 2017. Only one other international card network is present on the panels, and that is JCB of Japan.
Participation in the two organizations gives UnionPay – and through it the Chinese government – a role in “the creation and implementation of security standards that impact all U.S. businesses and consumers,” the letter said.
Senator Richard Durbin of Illinois introduced the Credit Card Competition Act last year.; R-Kan. Senator Roger Marshall; Peter Welch, a Democratic lawmaker from Vermont (now a senator); and In the upcoming Congress, Representative Lance Gooden, R-Texas, is awaiting reintroduction.
The legislation, according to MPC, would put an end to Visa and Mastercard’s long-standing monopoly over the processing of transactions on cards issued under their respective brands. Instead, it would be necessary for cards from the biggest banks in the country to be able to route over at least one rival network in addition to Visa or Mastercard’s networks. Banks would decide which networks to enable, but merchants would decide which to use, forcing networks to compete on costs, security, and service, saving merchants and their customers an estimated $11 billion annually.
American Express, Discover, or an independent network like NYCE, Star, or Shazam, which the Federal Reserve claims has less fraud than Visa and Mastercard, could be the second network under the legislation. But the law would close a security gap by preventing networks supported by foreign governments, like UnionPay, from entering the United States. processing market. Any bank could currently choose to route its credit card processing to UnionPay, which according to MPC may be effectively outsourcing consumers’ financial data to a foreign government.
The second-highest operating expense for most merchants after labor is the cost of credit and debit card swipe fees, which have increased by a factor of two over the past ten years and will reach a record high of $137.8 billion in 2021.
Source: furnituretoday.com
