Tom Wheeler: How the Credit Card Competition Act would enhance credit card security

Close up shot of customer paying money by tapping credit card to swiping machine at grocery shop - concept of digital payment, contact less transaction, and safety.

The recent introduction of the Credit Card Competition Act (CCCA) has unsurprisingly garnered opposition from giant banks, given that they want to keep on gouging the average Florida family for more than $1,000 per year.

Unfortunately, efforts by the big banks are blatantly misleading Floridians about the impact this bill would have.

A recent argument put forth by credit card companies suggests those giant banks are willing to throw Americans under the bus by using China UnionPay to process their credit cards. That is a strange argument for the industry to make — essentially, they are saying they can’t be trusted to protect Americans.

However, that worry would be avoided simply by passing the CCCA because it explicitly forbids the use of China UnionPay for processing U.S. credit cards.

China UnionPay’s association with the Chinese government raises significant security concerns and the potential for unauthorized data access. The CCCA serves as a safeguard against the inclusion of networks like UnionPay, ultimately protecting consumer data and national security interests.

Not only would the CCCA strengthen credit card security by addressing the influence of China UnionPay, but it would also promote healthy competition that raises security standards across the industry.

Under this legislation, credit card issuing institutions would offer at least two credit card network options for businesses to process transactions. One of these options would serve as an alternative to the Visa/Mastercard duopoly. This introduction of competition would incentivize the adoption of more secure payment processing options, especially because the smaller competitors have less than one-fifth the rate of fraud that Visa and Mastercard have.

Furthermore, increased competition inherently fosters innovation and drives organizations to improve their products and services. By allowing merchants to select from different credit card networks, the legislation encourages financial institutions to invest in advanced security measures, fraud detection systems and robust infrastructure. The CCCA will create an environment of continuous improvement and stronger security standards within the industry.

In addition to security improvements, the CCCA will have tangible benefits for businesses and consumers.

By lowering fees for businesses, the bill enables them to allocate resources to other aspects of their operations, leading to job creation and economic growth.

Consumers, on the other hand, will benefit from reduced costs, which will help Floridians make their budget stretch.

Furthermore, with multiple networks vying for market share, credit card companies will be motivated to offer enhanced rewards programs to attract and retain customers, providing additional value to consumers.

The concerns raised against the Credit Card Competition Act are unfounded and, in some cases, purposefully misleading. By promoting healthy competition and incentivizing innovation, the CCCA improves security and benefits businesses and consumers.

It is imperative that Sens. Marco Rubio and Rick Scott don’t believe the talking points being pushed by giant banks and credit card companies that want to keep gouging small businesses and consumers.

I am hopeful they will recognize the many benefits of the Credit Card Competition Act in promoting a secure, competitive and consumer-centric credit card industry and support this bill’s passage.

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Tom Wheeler is president of Custom Detailing Tally, Inc.