Explained: US Credit Card Competition Bill And How It Can Impact Visa, Mastercard

United States President Donald Trump has extended his support for the Credit Card Competition Bill, renewing a long-running push to increase competition in card payments. 

A report by Payments Dive noted that this requirement would apply only to card issuers with $100 billion or more in assets.

“Everyone should support Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff,” Trump wrote on his Truth Social account on Tuesday. The bill was introduced by Senators Roger Marshall, a Republican, and Dick Durbin, a Democrat.

The move comes days after Trump pushed for a one-year cap of 10% on credit card interest rates, calling it a move to improve affordability for consumers. Credit cards are a major source of profit for banks. Today, average interest rates in the US range between 19.65% and 21.5%, according to the Federal Reserve and industry data. A 10% cap would result in a significant reduction in those earnings.

The bill targets Visa and Mastercard, which dominate credit card processing. If implemented, it would require banks to offer merchants at least one alternative payment network for every credit card transaction.

A press release from Durbin’s office noted: “Today, US Senate Democratic Whip Dick Durbin (D-IL) and U.S. Senator Roger Marshall, M.D. (R-KS) reintroduced the Credit Card Competition Act, which will increase competition in the credit card market and put an end to the Visa-Mastercard duopoly that is squeezing small businesses—and, ultimately, consumers. President Trump endorsed the legislation early this morning.”

The Credit Card Competition Act proposal is aimed at lowering swipe fees that merchants pay every time a customer uses a credit card. The press release noted that Visa and Mastercard control about 85% of the market, which gives them the power to set fees with little negotiation. These costs are often passed on to consumers through higher prices.

If passed, this new bill would force banks to offer payment networks beyond Visa and Mastercard. This will increase competition in the segment. For Visa and Mastercard, this could mean reduced market share and lower fee income. More competition could pressure them to cut fees and may eventually favour consumers and small businesses.