How things have changed. Think payments. As Jimmy Soni notes in his excellent 2022 book The Founders (a history of PayPal), “In the late 1990s, only 10 percent of all online commerce was conducted digitally – the vast majority of transactions still ended with a buyer sending a check by mail.” Imagine that. While online transactions were supposed to take place online, even those who’d taken the plunge into this all new way of commerce were still reliant on the U.S. postal system.
It’s something to think about with the present top of mind. U.S. Senators Richard Durbin (D-IL) Roger Marshall (R-KS) introduced the Credit Card Competition Act of 2022 “to ensure that giant credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.” Up front, it will be said at first, second, or third glance that it’s hard to countenance legislation that would empower the Federal Reserve to pursue a non-market outcome inside an industry (credit cards) that embodies markets. Please read on.
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