Julian Morris, Senior Scholar for International Center for Law & Economics (ICLE) | ICLE
Julian Morris, Senior Scholar for International Center for Law & Economics (ICLE) | ICLE
Julian Morris, a senior scholar at the International Center for Law & Economics, expressed concerns about the Credit Card Competition Act in an op-ed. He said that the act would limit issuer and cardholder network choices, thereby reducing market competition.
"The legislation was misleadingly called the Credit Card Competition Act," said Morris. "The CCCA would actually remove the choice of network from both the issuer and the cardholder. This would almost certainly reduce competition among issuers. The legislation should really be called the Credit Card Anti-competition Act."
In 2021, U.S. merchants paid approximately $31.59 billion in interchange fees to credit card issuers. Network fees amounted to $4.15 billion for issuers and $7.34 billion for acquirers. The Federal Reserve's 2021 report on interchange fees and issuer costs detailed these figures, noting that the average interchange fee for transactions processed over single-message networks was $0.24, while dual-message networks averaged $0.23. Exempt issuers faced higher per-transaction network fees but received higher payments and incentives compared to covered issuers.
According to a study published in the Journal of the European Economic Association, regulatory interventions on consumer financial markets have specific effects on credit card fees. The research found that price caps on interchange fees reduced merchant costs but also decreased cardholder benefits, such as rewards programs. The study noted that issuers adjusted their business models in response to regulations, sometimes leading to unintended consequences for consumers.
Morris is a Cayman-based economist and policy analyst with over 30 years of experience in finance, technology, law, and policy. He currently serves as a senior scholar at the International Center for Law & Economics and is affiliated with the Reason Foundation. Morris has authored over 100 scholarly articles and policy papers focusing on sustainable development, innovation, and governance's intersection with economic growth.
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