Bill aimed at reducing credit-card 'swipe fees' puts Chinese company in crosshairs

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An overlooked provision in proposed legislation aimed at reducing the cost of credit card 'swipe fees' would also crack down on a Chinese company that critics fear has infiltrated American payment networks to mine consumers' sensitive financial information.

An overlooked provision in proposed legislation aimed at reducing the cost of credit card “swipe fees” would also crack down on a Chinese company that critics fear has infiltrated American payment networks to mine consumers’ sensitive financial information.

Visa, MasterCard, Discover and American Express are among the credit cards that have outsourced their credit card processing to UnionPay. Backers of the bill include a diverse crew of senators all across the political spectrum, including Democrats Dick Durbin of Illinois, Jack Reed of Rhode Island and Peter Welch of Vermont, and Republicans J.D. Vance of Ohio, Josh Hawley of Missouri and Mr. Marshall.

Groups that have come out in favor of the bill include the National Retail Federation, the International Brotherhood of Teamsters, the National Restaurant Association of Convenience Stores and the Retail Industry Leaders Association. A group of GOP senators including the ranking member of the Senate Committee on Banking, Housing and Urban Affairs, Sen. Tim Scott of Florida, and Sen. Mike Crapo of Idaho sent a letter last October to Treasury Secretary Janet Yellen expressing concerns about UnionPay’s increased footprint in the U.S. financial sector.

Ms. Dezenski said UnionPay represents a potentially small threat to U.S. consumers’ data, but when viewed in combination with Huawei, TikTok and other Chinese companies, it could pose a larger problem. Bryan Bashur, director of financial policy at Americans for Tax Reform, which opposes the legislation, disputes that it will be effective in cracking down on UnionPay. He says simply putting it on a list won’t do anything to curb Chinese aggression and exempts the three payment networks, such as AmericanExpress and Discover, that use UnionPay.

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