We all benefit from the ease and convenience that comes with an increasingly digitized economy. Credit card networks power online commerce and bring tremendous opportunity to Montana small businesses. But digital commerce also creates new attack vectors for identity thieves and fraudsters, necessitating robust defenses by banks and card providers to protect both consumers and businesses.
This massive, complex security defense does not materialize out of thin air. It is funded directly by payment processing costs, which merchants pay to banks for securely executing digital payments. This system is battle-tested and ever-evolving to meet new threats. And despite years of careful refinement and success in the field, proposed changes being considered by Congress could soon weaken that entire system and put all of us at risk.
Cybercrime and fraud are dominated by highly-organized transnational criminal networks that exploit any digital vulnerability they can find. Yet, when everyday consumers swipe their credit cards, they are actively engaging an invisible public safety shield. Modern electronic payment networks rely on a complex, real-time backend system fueled by massive investments in data security, artificial intelligence, and sophisticated monitoring technology. These systems flag and isolate fraudulent transactions within seconds, intercepting identity theft at the front end long before it can devastate a consumer’s life or result in losses to a merchant.
A significant portion of the credit card swipe fees fund these important cybersecurity and early-prevention tools. Anyone who has ever experienced a fraudulent transaction on their card knows just how valuable these services are.
However, this critical layer of public defense is currently facing a severe legislative threat in Washington. Congress is considering the “Credit Card Competition Act,” widely known as the Durbin-Marshall bill. Proponents pitch this legislation as an effort to inject competition into the payment space, but in reality, it would mandate a heavy-handed government routing intervention. The bill forces banks to accept alternative, untested processing networks without any regard for security, compliance, or quality.
By upending the structural economics of the electronic payments system, the Durbin-Marshall amendment would weaken established networks, decimating the interchange revenue explicitly used to reinvest in consumer protections and fraud monitoring innovation.
The consequences of this mandate would be severe, leaving Americans uniquely susceptible to identity theft. Under the Durbin-Marshall framework, the authority to choose the processing network shifts entirely from the consumer and their bank to individual merchants. This means the standard of transaction security becomes highly variable, dependent entirely on which cheaper, alternative routing network a merchant selects. History proves that shifting this decision-making power creates catastrophic security gaps. Following similar debit card interventions under the 2010 Durbin Amendment, many major retailers failed to adequately invest in data security. In the following years, we saw notorious multi-million-user data breaches at mega-stores like Target and Home Depot. Stripping funding from the payment ecosystem ensures that financial firms cannot sustain the heavy cybersecurity investments necessary to outpace modern hackers.
Worse still, small businesses would find themselves uniquely vulnerable to fraud and physical security risks. While mega-retailers possess the infrastructure to absorb transaction complexities, independent mom-and-pop shops lack the capability to manage fragmented routing options. Instead, reduced network security guarantees higher fraud rates for small business owners who cannot afford costly chargebacks. Stripping these security investments threatens to drive small businesses back toward cash-heavy operations.
To protect American consumers and small businesses, Congress must reject the Durbin-Marshall mandate and preserve the vital electronic defenses that keep our financial system safe. In an era of accelerating technological innovation fueled by artificial intelligence, now is not the time to be weakening our cybersecurity shield.
Steve Kelly is a Republican state representative from Kalispell. He serves on the Judiciary and interim Law & Justice committees.