2022-05-11 Charles Kim.Credit Card Competition Act
Questions for Charles Kim, Executive Vice President and Chief Financial Officer, Commerce Bancshares, Inc.
对 Commerce Bancshares, Inc.执行副总裁兼首席财务官 Charles Kim 的问题。
1. You testified during the hearing that “I think roughly 60 percent of interchange revenue goes out in the form of rewards.”
您在听证会上作证说：“我认为大约 60%的交换费收入以奖励的形式发放。”
a. Does this 60 percent figure apply across the banking industry or just to Commerce Bank?
a. 这个 60%的数字适用于整个银行业还是仅适用于商业银行？
My answer was based on Commerce Bank’s portfolio and my general knowledge of industry figures I’ve seen over time, and the figure represents the equivalent value of rewards relative to interchange. There are multiple income streams for credit card products. As a two-sided market, the interchange paid to retailers and the rewards received by consumers are determined through different but related market forces. These competitive forces provide the most value to all participants, merchants and our customers alike, and are not unlike those in other two-sided markets.
我的答案是基于 Commerce Bank 的投资组合和我对行业数据的总体了解，这个数字代表了相对于交换费的奖励等值。信用卡产品有多种收入来源。作为一个双边市场，支付给零售商的交换费和消费者获得的奖励是通过不同但相关的市场力量决定的。这些竞争力量为所有参与者、商家和我们的客户提供了最大的价值，这与其他双边市场的情况类似。
b. Does this 60 percent figure apply to credit card interchange revenue, debit card interchange revenue, or both?
b. 这个 60%的数字适用于信用卡交换收入、借记卡交换收入，还是两者都适用？
My answer was based on credit card interchange revenue. There are generally no rewards directly associated with debit cards.
我的回答是基于信用卡交换收入。借记卡通常没有直接关联的奖励。
c. Prior to your testimony, has Commerce Bank informed other card networks or banking trade associations about the percentage of interchange revenue that goes out in the form of rewards? If so, when and to whom?
在您作证之前，Commerce Bank 是否已通知其他卡网络或银行贸易协会有关以奖励形式支付的交换费收入百分比？如果是，何时以及通知了谁？
No, not that I am aware of.
不，据我所知没有。
d. To the best of your understanding, do Visa and Mastercard set default interchange fee rates at a level that enables 60 percent of interchange revenue to go out in the form of rewards?
d. 据您所知，Visa 和 Mastercard 是否将默认的交换费率设定在一个使 60%的交换收入以奖励形式发放的水平？
No, to the best of my knowledge, interchange rates are not set based on rewards. In this two-sided market, competitive forces will tend to drive the importance of factors like risk, benefits, features and services associated with the card. Rewards are determined by the individual issuing banks and vary by individual products,
据我所知，交换费率并不是根据奖励设定的。在这个双边市场中，竞争力量往往会推动风险、收益、功能和与卡片相关的服务等因素的重要性。奖励由各个发卡银行决定，并因不同产品而异。
customers and terms and conditions that are specific to each bank. There is not one kind of rewards card or card portfolio, which is a good thing.
每家银行都有特定的客户和条款条件。没有一种统一的奖励卡或卡片组合，这是一件好事。
Questions for Charles Kim
给查尔斯·金的问题
1) I have heard competing views on whether changes to interchange fees are beneficial for the consumer. Some argue that the consumer benefits through lower prices at the store while others say that the consumer benefits through free checking or rewards through their cards. What is your view on how any changes to interchange fees could impact the consumer?
1) 我听说过关于更改交换费是否对消费者有利的不同观点。有人认为消费者通过商店的低价受益，而另一些人则认为消费者通过免费支票或信用卡奖励受益。您认为对交换费的任何更改会如何影响消费者？
Interchange is an essential part of the income banks need to provide card-based services. It is therefore essential to consumers too, although they don’t know it. If interchange is reduced, whether directly or by stealth, the consumer must necessarily suffer as a result. One can see the true cost of government interference in a functioning market by reviewing the effects of artificially lowered interchange in other countries. The merchant lobby in the US may point to, and cheer, lower European interchange rates imposed by government. They dissemble about the burden paid by the European consumer in the end through higher costs for banking services, and few or no rewards.
交换费是银行提供基于卡的服务所需收入的重要组成部分。因此，对消费者来说也是必不可少的，尽管他们并不知道。如果交换费被减少，无论是直接还是隐秘地，消费者必然会因此受到影响。通过审视其他国家人为降低交换费的影响，可以看到政府干预正常市场的真正代价。美国的商家游说团体可能会指出并欢呼政府强加的较低的欧洲交换费率。他们掩饰了最终由欧洲消费者通过更高的银行服务成本和很少或没有奖励所支付的负担。
欧洲是很好的失败者，约等于什么都是错的傻瓜。
Any reduction in interchange would have a negative impact on consumers because it would have a negative impact on value of payments products, especially those offered by small and medium-sized banks. Banks invest in the card transaction before, during, and after the purchase. They must be rewarded for the ongoing investments that make the payment system possible. A reduction in revenue for those banks would mean a reduction in or exit from card-related businesses. Just as in Europe, Australia, and elsewhere the cost of financial services to the consumer would go up, the rewards for the consumer would go down or disappear altogether and local community banks and credit unions would be forced out of the business. The card business would be left to the Wall Street titans. Compare the thousands of American banks and credit unions serving our communities to the handful of banks in countries like Canada, Australia and elsewhere. We think that concentration of services is to be avoided so that small banks can continue to serve small communities. Interchange is a necessary part of that.
任何减少交换费的行为都会对消费者产生负面影响，因为这会对支付产品的价值产生负面影响，尤其是那些由中小型银行提供的产品。银行在购买前、购买中和购买后都对卡交易进行投资。他们必须因使支付系统成为可能的持续投资而获得回报。这些银行收入的减少将意味着减少或退出与卡相关的业务。正如在欧洲、澳大利亚和其他地方一样，消费者的金融服务成本会上升，消费者的回报会减少或完全消失，当地社区银行和信用社将被迫退出业务。卡业务将留给华尔街巨头。将为我们社区服务的数千家美国银行和信用社与加拿大、澳大利亚和其他地方的少数几家银行进行比较。我们认为应避免服务的集中，以便小银行能够继续为小社区服务。交换费是其中必要的一部分。
When the original Durbin amendment was made into law, the merchants cheered. The CFO of Home Depot famously said that company would benefit by taking millions of dollars to the bottom line while on an investor call. Fancy words and clever arguments can’t erase that fact.
当最初的杜宾修正案成为法律时，商家们欢呼雀跃。家得宝的首席财务官曾在投资者电话会议上著名地表示，公司将通过将数百万美元计入利润而受益。花哨的词语和巧妙的论点无法抹去这一事实。
According to the Federal Reserve Bank of Richmond, more than three-fourths of merchants surveyed did not change their prices after the Durbin Amendment was implemented, while 22 percent of merchants actually increased prices. Only 1 percent of merchants reduced prices after the Durbin Amendment was implemented. As the authors stated, ‘a sizable fraction of merchants [raise] prices or debit restrictions as their costs of accepting debit cards increase. However, few merchants [reduce] prices or debit restrictions as debit costs decrease.’ Part of the reason for the lack of a savings “pass-through” is that some merchants (particularly smaller merchants) saw interchange rates rise after the Durbin amendment was implemented because networks no longer offered discounts for smaller-ticket purchases — in effect, the price ceiling became the floor.
根据里士满联邦储备银行的数据，超过四分之三的受访商家在杜宾修正案实施后没有改变价格，而 22%的商家实际上提高了价格。只有 1%的商家在杜宾修正案实施后降低了价格。正如作者所述，“相当一部分商家[提高]价格或借记限制，因为他们接受借记卡的成本增加。然而，随着借记成本的降低，几乎没有商家[降低]价格或借记限制。”缺乏节省“传递”的部分原因是，一些商家（尤其是较小的商家）在杜宾修正案实施后看到交换费率上升，因为网络不再为小额购买提供折扣——实际上，价格上限变成了下限。
Merchants had the chance to give their Durbin amendment savings to the consumer in the form of lower prices. They just didn’t. We have no reason to believe they would do it now.
商人本有机会通过降低价格将杜宾修正案的节省让利给消费者。他们只是没有这样做。我们没有理由相信他们现在会这样做。
Last year, an American Bankers Association white paper summarized the benefits to consumers and merchants alike, including lower income consumers, of credit card rewards. Among other findings, the paper concluded that households of all incomes benefit from rewards cards, that most interest is paid by higher-income cardholders, and that credit card rewards are not a wealth transfer. Regarding this last point: merchant groups often argue that credit card rewards are a “reverse Robin Hood” offering whereby lower-income credit cardholders fund rewards for higher-income credit cardholders. Using a comprehensive and representative sample of credit card accounts provided by independent payments data company Verisk Financial, ABA’s study found that this view is simply inaccurate. On the contrary, policy proposals based on conjecture and misunderstanding of data about the Reverse Robin Hood theory could lead to serious unintended consequences for the very populations they intend to help
去年，美国银行家协会的一份白皮书总结了信用卡奖励对消费者和商家（包括低收入消费者）的好处。该白皮书的其他发现包括，各收入家庭都能从奖励卡中受益，大多数利息由高收入持卡人支付，信用卡奖励并不是财富转移。关于最后一点：商家团体经常争辩说，信用卡奖励是一种“反罗宾汉”提供方式，即低收入信用卡持卡人为高收入信用卡持卡人提供奖励。使用由独立支付数据公司 Verisk Financial 提供的全面且具有代表性的信用卡账户样本，ABA 的研究发现这种观点完全不准确。相反，基于对反罗宾汉理论数据的猜测和误解的政策提案可能会对他们打算帮助的人群造成严重的意外后果。
2) Using cards to pay for purchases has been on the rise. Some argue that merchants feel like they have to accept Visa and Mastercard regardless of the fees that are charged, or consumers will go elsewhere. Others believe that these cards allow for convenience and higher buying power benefiting both parties. What is your view on this?
2）使用信用卡支付购物正在增加。有人认为商家觉得无论手续费如何，他们都必须接受 Visa 和万事达卡，否则消费者会去别处。其他人则认为这些卡提供了便利和更高的购买力，对双方都有利。你对此有何看法？
There can be no doubt that the investments made by U.S. banks and credit unions in the American payment system infrastructure has paid massive dividends for consumers and merchants all over the world. As a nation, we should be proud of the fact that we invented and constantly refine the best payment system anywhere. It allows any card user to buy goods and services down the street, on-line, and in millions of merchants around the world, with confidence. We no longer worry about carrying large amounts of cash to buy gas on our road trips. We no longer buy large amounts of foreign currency or traveler’s cheques so that we can shop and eat on that once-in-a-lifetime foreign vacation. Instead, we use our rewards to subsidize the vacation and we use our card to rent our car, check into our hotel, and buy our meal in seconds and with ease. Sometimes we use our own money. Sometimes we borrow that money via our credit card. We frequently spend more than we would were we using cash.
毫无疑问，美国银行和信用社在美国支付系统基础设施上的投资为全球的消费者和商家带来了巨大的回报。作为一个国家，我们应该为发明并不断完善世界上最好的支付系统而感到自豪。它使任何持卡人都能自信地在街头、在线以及全球数百万商家处购买商品和服务。我们不再担心在公路旅行中携带大量现金来加油。我们不再购买大量外币或旅行支票来进行那次千载难逢的国外度假。相反，我们用奖励来补贴度假，用卡来租车、入住酒店，并在几秒钟内轻松购买餐点。有时我们用自己的钱。有时我们通过信用卡借钱。我们经常花的钱比用现金时更多。
No one group has benefitted from the interchange-based US Payments System more than the merchant community. Amazon, Sam’s Club, Wal-Mart et al have not suffered under it, they have prospered almost beyond belief. Interchange may be an expense to the merchant community (like the electricity bill), but it is one that has facilitated a massive growth in business for them. Merchants don’t accept cards because they must, they do so because it helps them grow their business**. A small business can open their doors and be plugged into a worldwide interchange of cardholders and businesses in minutes. That is an astonishing achievement. That system works. It will not benefit from heavy-handed government intervention.
没有哪个群体比商家群体从基于交换的美国支付系统中受益更多。亚马逊、山姆会员店、沃尔玛等并没有因此受损，反而几乎超乎想象地繁荣发展。交换费可能是商家群体的一项开支（如电费），但它促进了他们业务的巨大增长。商家接受卡片支付不是因为必须，而是因为这有助于他们发展业务。小企业可以开门营业，并在几分钟内接入全球的持卡人和企业交换网络。这是一个惊人的成就。这个系统有效运作。它不会从政府的强硬干预中受益。
These benefits can be quantified and the costs of accepting cards put in perspective. Per a recent report, the benefits to merchant of accepting cards is 9.36% of transaction value, on average, which far exceeds the 3.0% average cost of credit card acceptance. Interestingly, most major merchants now partner with Buy Now Pay Later firms, paying a fee is generally 2-3x higher than the average credit card fee (and much higher than the average debit card fee).
这些好处可以量化，并且接受卡的成本可以从整体上看待。根据最近的一份报告，商家接受卡的好处平均为交易价值的 9.36%，远远超过了信用卡接受的 3.0%平均成本。有趣的是，大多数主要商家现在与“先买后付”公司合作，支付费用通常比平均信用卡费用高 2-3 倍（并且远高于平均借记卡费用）。
As for whether merchants must accept cards, we feel that they would be foolish not to, but they do have other options. Merchants can and do accept cash, checks, ACH, and various other forms of payment. Those forms of payment are expanding all the time and merchants cheerfully adopt them, even when the cost of doing so is higher than credit cards. Target’s own Red Card offers 5% discounts on purchases. There is nothing to prevent merchants from building a better payment system. Failing that, they can pay their fair share for access to the best payment system in the world, the one we have now.
至于商家是否必须接受信用卡，我们认为不接受是愚蠢的，但他们确实有其他选择。商家可以并且确实接受现金、支票、ACH 和各种其他形式的支付。这些支付形式一直在扩展，商家也乐于采用它们，即使这样做的成本高于信用卡。Target 自己的 Red Card 提供 5%的购物折扣。没有什么能阻止商家建立更好的支付系统。如果做不到这一点，他们可以支付合理的费用以使用世界上最好的支付系统，也就是我们现在拥有的系统。
** The following is a partial list of the extra benefits various merchants provide to cardholders for using their credit cards. These generous benefits are in addition to any interchange expense the merchant pays. We suggest this is proof that these merchants value the system more than they let on and can easily afford to pay their share of the system’s upkeep. They do not need the Federal Government to favor them with preferred pricing.
以下是各商家为持卡人使用信用卡提供的额外福利的部分列表。这些慷慨的福利是商家支付的任何交换费用之外的额外福利。我们建议这证明了这些商家比他们所表现出的更重视这个系统，并且可以轻松负担系统维护的费用。他们不需要联邦政府以优惠价格来偏袒他们。
• Walmart Rewards Mastercard:
o 5% cash back at Walmart.com.
在 Walmart.com 享受 5%现金返还。
o 2% cash back in Walmart stores & fuel stations, at restaurants and on travel o 5% cash back in Walmart stores for the first 12 months
o 在沃尔玛商店和加油站、餐馆及旅行中享受 2%现金返还 o 前 12 个月在沃尔玛商店享受 5%现金返还
• Sam’s Club – Mastercard:
o 5% back on gas anywhere
在任何地方加油返 5%
o 3% back on Sam’s Club purchases for Plus members
Plus 会员在 Sam’s Club 购物可享受 3%返现
o 3% back on dining and takeout
餐饮和外卖返现 3%
• Walgreen’s Mastercard:
o $25 Walgreens Cash rewards when you open an account and make your first purchase.
开设账户并进行首次购买时可获得 25 美元 Walgreens 现金奖励。
o 10% Walgreens Cash rewards on Walgreens branded purchases
沃尔格林品牌商品可获得 10%沃尔格林现金奖励
o 5% Walgreens Cash rewards on all other brands and pharmacy purchases o 3% Walgreens Cash rewards on grocery and health & wellness purchases o
o 其他品牌和药品购买可获得 5% Walgreens Cash 奖励 o 杂货和健康与保健购买可获得 3% Walgreens Cash 奖励 o
• Southwest - ‘Rapid Rewards’ Visa:
•西南航空 - ‘快速奖励’ Visa:
o Earn 40,000 points after you spend $1,000 on purchases in the first 3 months from account opening
在开户后的前三个月内消费$1,000 即可赚取 40,000 积分
o Refer friends and earn up to 100,000 bonus points per year o Earn 5X points on Amazon, grocery and dining
o 推荐朋友，每年可赚取高达 100,000 奖励积分 o 在亚马逊、杂货和餐饮消费可赚取 5 倍积分
o Redeem points for flights, gift cards, merchandise, hotel stays, rental cars and exclusive Cardmember experiences
用积分兑换航班、礼品卡、商品、酒店住宿、租车和专属持卡人体验
• Costco – ‘Anywhere’ Visa:
o 4% on eligible gas purchases
符合条件的汽油购买可享受 4%的折扣
o 3% on restaurants and eligible travel
在餐馆和符合条件的旅行上享受 3%的优惠
o 2% on all other purchases from Costco and Costco.com
在 Costco 和 Costco.com 上的所有其他购买可获得 2%的返现
In many cases, retailers who partner with banks also get significant interchange reductions, share in card interchange revenue and receive volume discounts all while receiving the benefits of increased spend and customer loyalty. Taken together, these partnerships may make a merchant’s branded card the most cost-effective marketing and customer retention strategy.
在许多情况下，与银行合作的零售商也会获得显著的交换费减免、分享卡片交换收入并获得批量折扣，同时享受消费增加和客户忠诚度带来的好处。总的来说，这些合作关系可能使商家的品牌卡成为最具成本效益的营销和客户保留策略。
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