Intense competition is the hallmark of America’s retail industry, it drives innovation and brings consumers lower prices and great products and services. Unfortunately, the absence of competition elsewhere in the retail ecosystem stifles the benefits that naturally result from competition. RILA is committed to engendering competition throughout the retail ecosystem by pursuing policies that curtail anticompetitive business practices, remove roadblocks to innovation, and ensure retailers’ ability to improve the customer experience.
The connection between retailers and their customers is not always direct. Payment processing, internet access, search, and for some, online marketplaces, are examples of economic essentials that are controlled by third party entities. Many of these entities operate with far less competition than retailers. The absence of robust competition in these adjacent industries presents serious risks to retailers in the form of higher costs and disruptions to the overall customer experience. RILA is working with the Federal Trade Commission (FTC), Congress and the judiciary as they continue to examine how large technological and financial platform firms use their power to stifle competition and harm consumers and the public more broadly.
RILA is encouraging lawmakers to take four primary courses of action: closely examine technology platforms; scrutinize information infrastructure firms; carefully consider anticompetitive data use; and review competitor cooperation that is no longer technologically necessary—particularly in the area of credit interchange. RILA believes that strong competition in industries connected to retail will benefit consumers and allow retailers to thrive. RILA urges policymakers to scrutinize these four areas closely and act to strengthen a healthy and competitive marketplace.
Reforming The Payments Ecosystem
Merchants in the United States pay some of the highest interchange rates, or “swipe fees,” in the world. These fees are a significant line item for merchants – often the second largest expense after labor. Global card companies, along with major issuers, establish these rates in an anticompetitive manner that harms retailers and our customers. The retail community is seeking reforms that increase transparency and competition through legislative and legal action.
RILA is working with the Federal Reserve and FTC to ensure merchants’ right to route transactions across an option of networks is protected under federal law. With debit swipe fee reform upheld in the “Financial CHOICE Act,” RILA will begin working with members of both parties to develop a pathway for legislation aimed at bringing competition to the credit card market.