NACS  spoke out this week against attempts by Visa, MasterCard and their advocates in Washington, such as the Electronic Transactions Association (ETA), to pressure merchants to accept forms of payment that add costs to merchants and their customers.

These efforts, designed to extend the monopoly position of Visa and MasterCard into the future, were bolstered in a statement released this week by ETA, in which the group called the decision by drugstore chains CVS and Rite Aid to block mobile payments services like Apple Pay, Google Wallet and Softcard as “anti-consumer and anti-competitive.”

ETA continued: “This decision has nothing to do with convenience, reliability, or security. Rather, published reports indicate this is a deliberate boycott in favor of CurrentC, a mobile payments system supported by large retailers and slated for launch next year. Reports indicate that MCX, the organization behind CurrentC, requires all its participating merchants to block any mobile payments services that compete against CurrentC. Because MCX says its retailers represent one-fifth of total U.S. retail sales, this group boycott could negatively impact consumer choice in the mobile payments marketplace.”

In response to the ETA, NACS made the following statement:

“Unfortunately, the Electronic Transactions Association wants to use its voice to force the Visa/MasterCard monopoly into mobile payments. Those two dominant credit card networks have faced a lengthy series of antitrust actions from the U.S. Department of Justice and merchants over the years due to their anticompetitive conduct. Now, they are working feverishly to require merchants to accept their preferred technology, near-field communications (NFC), so that they can extend their dominance into the future. These attempts, if successful, will only serve to increase costs on merchants and their customers and kill real innovation before it ever gets started.

The credit and debit card system in the United States stopped innovating and fell behind the rest of the world on security a generation ago due to the market dominance of Visa and MasterCard. That is why the U.S. still uses magnetic stripe technology while virtually all other advanced countries are using PIN numbers along with computer chips. Now, innovative new companies are finding ways for people to use their smartphones to pay for things through technologies like blue tooth, SMS, QR codes and more. In fact, some are looking at ways for virtual currencies to help make electronic payments work more efficiently. Many of these technologies could dramatically reduce the costs of paying for things. But Visa and MasterCard want to force merchants to take their preferred technology — and that’s their strategy to block these other innovators out of the market before they can get started.

Apple Pay stopped short of real innovation and is simply putting Visa and MasterCard accounts into peoples’ phones. That is their choice to make. But it is a mistake for ETA to try to shut down competition from other payments innovators that might have better technologies. ETA’s position is the equivalent of requiring everyone to buy a Betamax — and hoping no one will notice that VCRs and DVD players will shortly be coming to market. Instead of organizing consumer boycotts, ETA should be rooting for innovation. If we have that, the best technology will help us all win and move out from under the Visa/MasterCard monopoly.”

The Electronic Transactions Association represents payments and technology companies.