Visa, Mastercard are effectively monopolies. They control 80% of the market. Certainly part of the 80% of the market. This is classic, classic monopolistic behavior. And yet your testimony here today is is you don't want any competition. [00:00:15] Yesterday, Republican Senator Josh Hawley went on an absolute tirade against Visa and Mastercard for what he himself described. And you heard it in that video as monopolistic behavior. Now, look, before we show you more of his incredible rant. [00:00:31] And I do give him credit for actually, you know, doing more than just talking the talk. I mean, he's he's really holding these credit card companies feet to the fire. I do want to give you some more context so you understand what this is all about. So yesterday the Senate held a hearing on competition in the credit card industry. [00:00:49] And one huge focus of that hearing was basically how much these companies are charging when it comes to swipe fees. And when it comes to those swipe fees, don't think that it's just the merchant or the retailer that you're shopping at. [00:01:05] Those costs do end up getting passed down to you, the consumer. And if you're not familiar with those swipe fees or how disastrous they really are, here's a good video explainer just to catch you up. When you use your credit card, the transaction runs through a store's [00:01:21] processing system, through the credit card's network, to your card's bank, and there are fees throughout these steps. The processing system's fee is generally fairly low, around one tenth of a percent of the total purchase. There's a large market the merchant can choose from, which can keep this cost down. [00:01:38] Then there's the credit card's network fee around a quarter of a percent. And the largest fee of this system also happens here the interchange fee. It's usually around 2 to 3%. It's set by the card networks, but it's paid to your bank that issued your credit card. [00:01:54] - You get rewards for every purchase. - Everything. Essentially, that fee helps to fund the rewards that we all get when we use our credit cards. Merchants, paid banks, and other credit card issuers interchange fees set by Visa and Mastercard, roughly $55 billion just last year. [00:02:11] Interchange fees vary by card. Generally, a higher rewards card will come with a higher interchange fee, and businesses have little control over this. They can't choose to not accept a high rewards card because of the fees. If they want to accept any of a network's credit cards, they have to accept [00:02:27] all of that network's credit cards. So this is the reason why Holly is accusing Visa and Mastercard of basically running this monopolistic game, right? Because the the retailers, the businesses that take credit cards don't really [00:02:44] have any options in regard to, you know, other working with other processors or other services that might have lower fees because Visa and Mastercard will essentially, find a way to retaliate [00:03:00] and make sure that they have less options. So Visa and Mastercard have this a vise grip on the credit card market. That's important to know. And here's how senators Dick Durbin, who's a Democrat, and Roger Marshall, who's a Republican, explain how much money visa and Mastercard make and how much it's [00:03:17] actually costing you the consumer. Take a look. In 2023 alone, visa and Mastercard charge merchants more than $100 billion in credit card fees, mostly in the form of interchange fees. The average American family spends over $1,100 annually on swipe fees, [00:03:37] $1,100 in the United States, swipe fees are over nine times higher than in the EU, four times higher than China and twice that of Canada. Last year alone, the retailers paid over $170 billion in swipe fees for small businesses. [00:03:54] These fees are second only to labor cost, often exceeding utilities or even health care expenses for their employees. Bruh. Like that's crazy. That is crazy that it cost the employers more than what it costs [00:04:09] to provide health care to their employees. That's that's insane. Okay, so Durbin and Marshall are taking some action. Durbin and Marshall have co-sponsored the Bipartisan Credit Card Competition Act, which takes aim at visa and Mastercard market dominance by requiring banks [00:04:26] with more than $100 billion in assets to offer at least one other payment network on their cards besides visa and Mastercard. Essentially, what they're trying to do is give people more options. And the way that you you know, the only way that these fees will [00:04:44] come down is if there's more options for consumers and retailers. In this case, we're talking about the retailers. We're talking about a different payment network that might actually offer lower fees, thus introducing competition into this market. Now, with all that in mind, let's go back to Josh Hawley [00:05:03] and listen to his full rant, which I do think is worth listening to. Visa, Mastercard are effectively monopolies. They control 80% of the market. Certainly part of the 80% of the market. I'm just having a hard time understanding Mr. Sheedy and Miss Kirkpatrick. [00:05:20] You have a business model. You're making over 50% profit margin. You are able to give the shaft to small businesses. Estimated cost to Missouri businesses from these fees is $1.5 billion. [00:05:37] That's with a B billion dollars a year a year. Why aren't all of these businesses running away from this model? Because they don't have a choice. Because you control so much of the market. This is classic, classic monopolistic behavior. And yet your testimony here today is is you don't want any competition. [00:05:53] You have 80% of the market, but you don't want any more competition. I just I'm having a hard time finding that position defensible, let alone sympathetic. I mean, it's unbelievable the amount of money that you're making. [00:06:10] What's also unbelievable is the fact that what you just heard came out of the mouth of a Republican lawmaker, and I want to just spend a minute or two focusing on that because, you know, look, historically in this country, Republicans have been in the pocket of financial institutions, of big, big banks. [00:06:29] Increasingly and unfortunately, over the last few decades, the same has been the case with Democratic lawmakers. And, you know, the residual benefits of the FDR era was something that they were able to enjoy for a long time. But I think that that, that polish is really starting to fade away [00:06:47] when it comes to the Democratic Party, which is why, you know, in the outcome of the 2024 presidential election, you have more and more voters really leaving the Democratic Party and specifically stating that they feel Democrats have abandoned the working class? [00:07:02] Now, look, I don't know what really motivates Josh Hawley, and I don't care. I've seen him speak out against this type of grift, this type of abuse from financial institutions consistently enough to be willing to take what he's saying at face value, that he actually wants [00:07:20] to do something about this. And when you see a Republican or someone from the opposing political party advocate for things that you want, you should provide positive reinforcement for that and not go after Democrats who are willing to work together with individuals like Josh Hawley in order [00:07:38] to accomplish this very specific goal. So you can definitely oppose Josh Hawley on a whole host of other things, and I certainly do. But when it comes to this issue, if he's willing to work with someone like Bernie Sanders, we should applaud that. We should be happy about that, because ultimately, what we want more than [00:07:56] anything isn't to protect our own tribe and never work with the other tribe because they're bad guys. We want to accomplish policy goals, and there are some areas in which, even in a Trump administration, I think that we would be able to as long as there's like negotiation [00:08:12] and working together in good faith to accomplish some of these policies. And I think this is a good example of one. So speaking of Holly, he actually has found himself in a fascinating and unusual policy alliance with both Donald Trump and Senator Bernie Sanders. So on the campaign trail, Trump had stated that he would temporarily cap [00:08:31] credit card interest rates at around 10%. I mean, 10% is already pretty high, right? But they're actually very, very like they're much higher than 10% right now. So capping the interest rates for credit cards, I think is a fascinating idea. [00:08:47] And I totally support it, especially at a time when consumer debt in America is as at an all time low. All time high. It's just crushing American families across the country. So last week, Bernie Sanders reminded Trump of his promise. [00:09:03] And here's what he tweeted. He wrote. I look forward to working with the Trump administration on fulfilling his promise to cap credit card interest rates at 10%. We cannot continue to allow big banks to make record profits by ripping off Americans, by charging them [00:09:20] 20 to 30% interest rates, that is usury. And guess what? Josh Hawley jumped in on the conversation, responding with an anti-usury bill. Capping outrageous credit card rates ought to be a top priority [00:09:36] of the next Congress. So look, leftists want to know why did Bernie Sanders change the entirety of his political identity? Just because, you know, he got a little bit of positive attention from Donald Trump? How did that. Why is he doing that? I'm kidding. That's a stupid argument to make. [00:09:52] That's what a dumb person would say. If you see an opportunity to actually accomplish something on behalf of the American people, you should go for it full speed ahead. He also brought up the issue of massive credit card debt during this hearing. Let's take a look. Do either of you know how much debt is owed on your networks, Miss Kirkpatrick? [00:10:11] We're not the bank, so we don't have visibility into that information. We also don't generate revenue from interchange. Okay. You have no idea. Mr.. Do you know? - I don't know. - Well, let me let me help you out. Let's have a look. It's $1.17 trillion. [00:10:29] $1.17 trillion is what consumers now owe on your credit card network. So either of you know what the average interest rate is on your networks, Mr. Kirkpatrick? Oh, Senator, we're not the bank. We don't set the interchange. We don't set the rates from it. [00:10:45] And, you know, do you do you know what it is? This is your business model. We don't. - We don't collect revenue from. - Interest rates, do you? No, I don't, Senator. I mean, do either of you read the newspaper? Forbes magazine just estimated last week that the average average credit card Apr [00:11:01] in your networks is 28.75% average. Did she just say we don't collect revenue from interest rates? Like, where does that money go? It just disappears, like in thin air. [00:11:17] Like what? Okay. Anyway. But I love the fact that he's holding their feet to the fire. He deserves credit for that. And typically, I would have some pretty salty commentary about. Oh, look, another congressional hearing. Ooh, and more theater, more theater. [00:11:34] But we just had the election. Okay. This isn't theater. I think that this is actually something that Holly cares about. He has talked about it consistently, and so this could be a really good opportunity for like minded Democrats on this specific issue, again, to push for legislation and passed legislation to cap the interest [00:11:54] rates for credit cards to do something about the monopolistic system when it comes to credit card swipes and the payment processing. So we'll see what happens. But I'm just really wanting to share this with you all, because I do think that there could be opportunities to accomplish something on behalf of Americans, [00:12:12] especially at a time when it feels like deregulation has crushed Americans, crushed their personal finances, and certainly led to a system where people are just crippled with insane amounts of debt. So we'll definitely stay on the story and give you guys updates as it develops. [00:12:27] Look, I know the system feels broken and it's hard to engage with the news right now, but it's not the time to tune out. That's just letting the system go unchecked and unchallenged. We need to know what Trump and the Republican Party are up to, and we need Democrats to understand how they even got here in the first place. [00:12:44] That's why I'm working with Ground News. They're an independent app and website that allows you to see through mainstream media narratives and keep both sides in check. For every story, you can swipe to see which news sources are reporting on it. Even independent ones left out of the mainstream media bubble [00:13:02] with visual breakdowns of their political bias, credibility, and who's funding the conversation. Compare coverage and reveal essential stories that the left and the right aren't discussing. Take a break from the chaos, but don't check out and let others shape your future. [00:13:18] Demand transparency and the leaders who are supposed to serve you and the news to accurately inform you. Go to ground Dot news. Slash tight or scan the QR code to take advantage of ground news. Biggest sale of the year. You can save 50% on their top tier vantage plan, which is what we use, [00:13:37] and stay informed without getting overwhelmed by what's going to happen in the next four years. Because we are the power behind democracy, not just bystanders in a rigged game.