Federal Reserve May Launch An Investigation Against Visa And Mastercard For Charging Retailers
The Federal Reserve System (Fed, Central Bank) may investigate payment systems such as Visa and Mastercard in connection with complaints about excessively high fees from retailers during the new type of coronavirus pandemic.
According to the BI, Senator Richard Durbin (Democrat from Illinois) sent a letter to the Fed, drawing attention to the fact that American retailers, who are already in a difficult situation due to the forced suspension of trade during the pandemic, are forced to pay excessively high fees for conducting debit card transactions. Their volume has increased significantly due to a decrease in cash payments. At the same time, systems such as Visa and Mastercard, taking advantage of the moment, set prohibitively high fees for retailers for such operations.
As the portal explains, American laws traditionally allow retailers to independently determine through which systems customers pay for goods and services. One of the sub-legislative acts, which came into force in 2010, sets a limit on the fee that banks charge for such transactions. For retailers, a favorable treatment was established, which allowed them to make payments through several channels at once and, at the same time, transfer a preferential low fee to Visa and Mastercard. The mentioned payment systems now violate this rule, Senator Durbin is convinced.
As estimated by Bloomberg, the consequences of the pandemic caused by the coronavirus disease triggered the highest number of major bankruptcies in the United States since the global financial crisis in 2008. According to the Agency, in may 2020 in the United States, 27 companies declared bankruptcy and asked for protection from creditors based on one of the points of the American bankruptcy law that allows for the reorganization of activities. The record for this indicator remains in May 2009, when 29 private companies went bankrupt in the United States. The Agency, in its calculations, took into account only those enterprises that owed at least $50 million.