The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act recently passed the U.S. Senate; a legislative milestone driven by free markets to strengthen the nation’s payments system through ongoing innovation and introduce even more competition.
Yet this progress was nearly derailed, once again, by Sen. Roger Marshall (R-Kan.), who attempted to attach his controversial credit card mandates to the GENIUS Act. This marked his third attempt to bypass regular order and force through his credit card government mandates by piggybacking on unrelated legislation, having previously tried - and failed - with both a defense authorization bill and an appropriations package.
Sen. Marshall’s proposal, which would force government regulation on credit card transactions, is being pushed on behalf of corporate megastores aiming to reduce their operating costs and boost profit margins. But despite persistent efforts, the bill continues to fail and for good reason. Unlike the GENIUS Act, the Durbin-Marshall credit card mandates are not designed to foster competition. Instead, they amount to a government takeover of America’s credit card system positioned to hand billions to corporate megastores while undermining the security, efficiency, and consumer benefits of our payments infrastructure.
The reality is credit cards deliver extraordinary value to both consumers and businesses. While retailer lobbyists claimed credit card processing costs totaled $148.5 billion in 2024, citing data from The Nilson Report, what they conveniently omitted is these processing costs were the result of nearly $6.5 trillion in sales facilitated by electronic payments last year. That’s a pretty good deal for retailers, especially when one considers that many of the same retailers have steadily raised coffee prices and other everyday items, a cost increase far more noticeable to the average consumer.
They also ignore the fact interchange rates have remained steady for nearly a decade. Since interchange scales with sales volume, the rise in processing costs simply corresponds to higher sales revenues (or, arguably, results from merchants’ own pricing increases) - revenue made possible by the ability to seamlessly accept electronic payments.
These costs also pale in comparison to the estimated $248 billion in annual economic benefits to businesses and consumers, which is far more than the cost of processing and a net benefit of nearly $100 billion. To put it into perspective, the value of credit cards is equivalent to over 40% of the average household’s annual grocery bill.
Let’s start with fraud protection. Credit card networks and banks have invested billions of dollars to protect consumers and businesses. These investments paid off. Credit cards helped merchants save more than $80 billion in avoided fraud losses in 2023.
The convenience of credit cards also increases merchants' sales. Customers who use credit cards spend more than double compared to debit card users and more than triple compared to cash users. In 2023 alone, credit card acceptance accounted for more than $60 billion in added retail merchant sales. Fraud protection and increased sales together delivered $140 billion in value to merchants.
Consumers benefit from using credit cards, too. The top banks paid $68 billion in credit card rewards in 2022. Juniper Research says consumer credit card rewards could exceed $108 billion next year. Small businesses use these rewards as well. According to a University of Miami paper, small businesses earn $12 billion in rewards when using credit cards themselves.
Cards also make operations smoother and more profitable for merchants. A report from the IHL Group, a global research firm, found that the cost of handling cash payments ranges from 4.7% for retailers on the lower end to over 15.5% for bars and restaurants. That’s far higher than the average credit card interchange rate, which has stayed flat for over a decade at less than 2%.
The National Association of Convenience Stores (NACS) estimates convenience store staff waste up to 20 paid labor hours per week merely counting cash. They also report that full-time convenience store employees earn $14.33 an hour, meaning an average store pays up to $14,903 just to count cash. This figure doesn’t even include other costs exclusive to cash payments, such as theft, which costs U.S. retailers and restaurants $40 billion annually. Using credit cards not only protects small businesses’ revenue but also allows owners to save on additional security measures.
The numbers speak for themselves: $80 billion in avoided fraud losses. $68 billion in credit card rewards. $60 billion in added sales. $40 billion in saved time. Credit card benefits total $248 billion, far exceeding the $148.5 billion in fees by $100 billion. Megastore lobbyists should remember these numbers the next time they complain about interchange fees. Instead of seeking to take away $248 billion in annual economic benefits from consumers and small businesses, policymakers must recognize the value of credit cards and the benefits they bring to the American people.
Instead of stripping away these benefits, policymakers should continue to recognize and protect the essential role credit cards play in the financial lives of Americans. Personally, I am grateful for the senators who stood up for the integrity of the payments system by rejecting Sen. Marshall’s misguided proposal. Their leadership helps preserve a system that supports growth, security, and prosperity across the entire economy.
