Visa, Mastercard In Trouble Again? Trump Revives Credit Card Competition Act To End ‘Swipe Fee Ripoff’

Retailers and consumers could see lower costs, while banks and card networks face margin pressure and reduced control over transaction routing.

• The Credit Card Competition Act, introduced in 2023, is legislation that would “enhance competition and choice in the credit card network market, which is currently dominated by the Visa-Mastercard duopoly.”
• Marshall had noted that the credit card companies are increasing their hidden swipe fees and price-gouging small businesses and consumers. 
• In a statement on Monday, the Defense Credit Union Council (DCUC) and the Association of Military Banks of America (AMBA) strongly opposed the Credit Card Competition Act.

After floating the idea of a cap on credit card interest rates, U.S. President Donald Trump is now pushing a new front in the battle over consumer costs ahead of the midterm elections: the Credit Card Competition Act.

“Everyone should support great Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff,” Trump said on Truth Social.

But what exactly does the legislation entail?

The Credit Card Competition Act

The act was first put forth in 2023 by U.S. Senate Majority Whip Dick Durbin, the then Chair of the Senate Judiciary Committee, and U.S. Senators Roger Marshall, Peter Welch and J.D. Vance. They collectively introduced the bipartisan, bicameral Credit Card Competition Act of 2023 and noted that this would “enhance competition and choice in the credit card network market.”

In November 2024, the committee held a hearing scrutinizing what lawmakers called a Visa–Mastercard “duopoly,” with rare bipartisan agreement that high swipe fees are hurting retailers and small businesses.

Marshall had noted that the credit card companies are increasing their hidden swipe fees and price-gouging small businesses and consumers. He said that this legislation would rein in the big banks and the credit card industry, drive down costs for convenience stores, gas stations, and other small businesses, and ultimately pass those savings on to consumers. 

Under the Credit Card Competition Act, the Federal Reserve would issue regulations within one year, ensuring that banks in four-party card systems with assets over $100 billion cannot restrict the number of networks on which an electronic credit transaction may be processed.

These four-party card systems cannot restrict credit card transactions to fewer than two unaffiliated networks and must mandate that at least one of them be outside the top two largest networks. Visa and Mastercard are known as “four-party” networks.

Stocks In The Spotlight

When the Act was first drafted, the senators noted that there were four U.S. credit card networks, mainly Visa, Mastercard, American Express, and Discover. According to the Federal Reserve data mentioned in the 2023 Act, Visa and Mastercard account for nearly 576 million cards, or about 83% of general-purpose credit cards. 

Investors are closely watching these major credit card companies as well as JPMorgan Chase, Citigroup, and Bank of America.

Wall Street & Industry View

“The move is a ham-fisted attempt from the administration to support households and boost consumer activity. Assuming the policy passes into law, it could have the short-term impact of boosting household cash flows and helping demand,” Kyle Rodda, Senior Financial Market Analyst at Capital.com said.

“In the bigger picture, it’ll constrain credit creation and weaken activity – and, of course, hinder financial sector profits. That will be a growth drag, although it may deter the build-up of leverage on household balance sheets,” he added.

In a statement on Monday, the Defense Credit Union Council (DCUC) and the Association of Military Banks of America (AMBA) said they were strongly opposed to the Credit Card Competition Act. DCUC and AMBA represent not-for-profit defense credit unions and military-serving banks dedicated to America’s armed forces, veterans, and their families.

They noted that the Act would harm service members and undermine the financial institutions that serve them, all while enriching only big retailers at consumers’ expense. “We urge you to reject this misguided legislation and prevent its inclusion in any must-pass bill,” the associations said.

How Are Stocktwits Users Reacting?

Retail sentiment on Visa and Mastercard remained unchanged in the ‘bullish’ territory compared to a day ago, while on Mastercard, the sentiment jumped to ‘extremely bullish’ from ‘bullish’ during the same time.

Sentiment was ‘extremely bullish’ for JPMorgan, jumping from ‘neutral’ ahead of earnings on Tuesday. Retail sentiment on Citigroup was in the ‘neutral’ territory and ‘bearish’ for Bank of America.

Shares of Visa closed down 2% on Monday, while Mastercard fell 1.61% and American Express was down nearly 5%. JPM stock fell 1.4%, Citigroup declined nearly 3% and Bank of America closed down over 1%.

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