Tell Congress: Operation Choke Point is Choking Off Legitimate Commerce
Tell Congress: Operation Choke Point is Choking Off Legitimate Commerce
The Issue
Consumers in the U.S. rely on electronic payments to purchase more than $5 trillion in goods and services each year from the eight million U.S. merchants that accept debit and credit cards. These payment systems are, like highways or communications, interconnected networks that make it possible for consumers and merchants to exchange money. Without payments infrastructure, commerce in this country would grind to a halt.
Payments companies share an interest with law enforcement in stamping out fraud – after all, because consumers have zero liability for fraud, it is payments companies that bear the financial burden of such illegal activity. We think we make a better partner than a target in the effort to choke off crime.
* Recent law enforcement actions indicate that, through the crude tool of litigation, government agencies seek to regulate the credit card processing industry in a way that ignores the regulatory regime – established by Congress, the bank regulators, and the networks of Visa, MasterCard, and other card brands – that has governed processors’ business models for decades.
* When used against reputable credit card payment processors who did not knowingly or intentionally assist “bad” merchants, this course of law enforcement action will inflict collateral damage on the entire payments ecosystem, resulting in higher transactional costs for merchants that will be passed down to consumers.
* Reputable credit card payment processors who employ arms-length relationships with their merchant customers have no interest in permitting “bad” merchants to harm consumers, and they invest significant resources in vetting and policing their merchants.
We encourage Congress to recognize the value of a collaborative approach with the payments industry to best protect consumers from fraudulent activities. This approach would mitigate the risk that an overly broad enforcement policy will cause law abiding merchants to lose access to payments systems or face higher transaction costs that will be passed on to consumers.
The Issue
Consumers in the U.S. rely on electronic payments to purchase more than $5 trillion in goods and services each year from the eight million U.S. merchants that accept debit and credit cards. These payment systems are, like highways or communications, interconnected networks that make it possible for consumers and merchants to exchange money. Without payments infrastructure, commerce in this country would grind to a halt.
Payments companies share an interest with law enforcement in stamping out fraud – after all, because consumers have zero liability for fraud, it is payments companies that bear the financial burden of such illegal activity. We think we make a better partner than a target in the effort to choke off crime.
* Recent law enforcement actions indicate that, through the crude tool of litigation, government agencies seek to regulate the credit card processing industry in a way that ignores the regulatory regime – established by Congress, the bank regulators, and the networks of Visa, MasterCard, and other card brands – that has governed processors’ business models for decades.
* When used against reputable credit card payment processors who did not knowingly or intentionally assist “bad” merchants, this course of law enforcement action will inflict collateral damage on the entire payments ecosystem, resulting in higher transactional costs for merchants that will be passed down to consumers.
* Reputable credit card payment processors who employ arms-length relationships with their merchant customers have no interest in permitting “bad” merchants to harm consumers, and they invest significant resources in vetting and policing their merchants.
We encourage Congress to recognize the value of a collaborative approach with the payments industry to best protect consumers from fraudulent activities. This approach would mitigate the risk that an overly broad enforcement policy will cause law abiding merchants to lose access to payments systems or face higher transaction costs that will be passed on to consumers.
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Petition created on July 10, 2014