Trump Endorses Credit Card Competition Bill Targeting Visa-Mastercard Duopoly
President Trump has endorsed the bipartisan Credit Card Competition Act, which targets the Visa-Mastercard duopoly controlling 85% of the credit card processing market. The bill would require banks with over $100 billion in assets to offer alternative payment networks, potentially reducing swipe fees for merchants and consumers. This endorsement comes alongside Trump's separate proposal for a 10% cap on credit card interest rates.
*this image is generated using AI for illustrative purposes only.
President Donald Trump has endorsed the Credit Card Competition Act, lending presidential support to bipartisan legislation designed to challenge the dominance of Visa and Mastercard in the credit card processing industry. Trump expressed his backing on Truth Social, stating that "Everyone should support Republican Senator Roger Marshall's Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff." The bill represents a renewed effort to increase competition in the card payments sector, with requirements that would apply specifically to card issuers holding $100 billion or more in assets.
Legislative Framework and Bipartisan Support
The Credit Card Competition Act has been introduced jointly by Republican Senator Roger Marshall and Democratic Senator Dick Durbin, demonstrating rare bipartisan cooperation on financial regulation. According to Durbin's office, the legislation aims to "increase competition in the credit card market and put an end to the Visa-Mastercard duopoly that is squeezing small businesses—and, ultimately, consumers." The bill's core requirement would mandate banks to provide merchants with at least one alternative payment network option for every credit card transaction.
Market Dynamics and Current Structure
The legislation directly addresses the concentrated market power held by Visa and Mastercard in credit card processing. The current market structure presents significant challenges for merchants and consumers:
| Market Parameter: | Current Status |
|---|---|
| Visa-Mastercard Market Share: | Approximately 85% |
| Asset Threshold for Requirements: | $100 billion or more |
| Current Pricing Power: | Limited merchant negotiation ability |
| Fee Structure Impact: | Costs passed to consumers through higher prices |
This market concentration enables the two companies to set fees with minimal competitive pressure, as merchants have limited alternatives for processing credit card transactions.
Potential Industry Impact
If enacted, the Credit Card Competition Act would fundamentally alter the competitive landscape for credit card processing. Banks subject to the legislation would be required to offer payment networks beyond the traditional Visa-Mastercard options, creating new opportunities for alternative processors to gain market share. This increased competition could pressure the dominant players to reduce their fee structures to maintain their market positions.
Broader Financial Policy Context
Trump's endorsement of the competition bill comes alongside his separate proposal for a 10% cap on credit card interest rates, positioning both measures as consumer affordability initiatives. Current credit card interest rates in the US range between 19.65% and 21.50% according to Federal Reserve and industry data, making the proposed cap a significant reduction from existing levels. Credit cards represent a major profit center for banks, and both the interest rate cap and increased processing competition could impact financial institution revenues.
Implementation and Market Response
The legislation specifically targets the fee structure that merchants pay for credit card transactions, commonly known as swipe fees. These costs are typically incorporated into retail pricing, meaning that reduced processing fees could potentially benefit consumers through lower prices. For Visa and Mastercard, successful passage of the bill could result in reduced market share and lower fee income as new competitors enter the processing market with potentially more competitive pricing structures.
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