Julian Morris, a senior scholar at the International Center for Law & Economics, said that credit card price controls have not succeeded in benefiting consumers and small merchants. Instead, he argued, these controls have led to reduced card benefits and increased fees. This statement was made in an op-ed.
"Ultimately, all these attempts to impose price controls on payment networks have caused net harm to society," said Morris. "While some larger merchants have seen cost savings, they have passed on little if any of those savings to consumers. Smaller merchants typically have not seen a reduction in the fees charged by their acquirers. Consumers have lost card benefits and/or now face higher fees that exceed any reductions in the cost of goods and services paid for with their cards."
The Durbin-Marshall Credit Card Act, also known as the Credit Card Competition Act, is a bipartisan proposal introduced to increase competition in the U.S. credit card market. According to Reuters, the bill requires banks with over $100 billion in assets to enable at least two unaffiliated networks on each card. The legislation aims to reduce the "swipe fees" that merchants pay for credit card transactions, which currently average around 2% of the purchase price. Payment networks such as Visa and Mastercard oppose the bill, warning it could undermine card security and consumer rewards programs.
A study cited by the George Mason University Law & Economics Center found that smaller merchants often experienced fee increases as networks removed low-rate incentives for small-ticket transactions. The study suggests that consumer benefits are limited or indirect, raising questions about the broader impact of such price control policies.
According to the Cayman Alternative Investment Summit, Morris is a Senior Scholar at the International Center for Law & Economics and previously served as its Executive Director. He has over three decades of experience in public policy and economics, working with international think tanks and policy institutions. Morris holds advanced degrees from Cambridge, Edinburgh, and University College London and has published extensively on regulatory and legal policy, including payment systems.