President Donald Trump has renewed his campaign for the Credit Card Competition Act. He is urging Congress to reduce credit card processing fees that retailers pay to banks. The proposal has backing from both Republican and Democratic lawmakers. It has gained significant momentum ahead of November’s midterm elections. Meanwhile, major financial institutions continue to warn that the measure could reduce card rewards and restrict access to affordable credit.
Speaking at a Kansas campaign rally supporting Senator Roger Marshall, R-Kan., Trump emphasized that the legislation could save a typical American family more than $2,000 annually. The bill was originally introduced by Marshall and Senator Durbin, D-Ill. It would require major card issuers with at least $100 billion in assets to enable payment transactions through at least two unaffiliated credit card payment networks.
The renewed push follows a series of public endorsements. According to the Merchants Payments Coalition, Trump has called for the legislation six times since January. Meanwhile, the National Association of Convenience Stores reported that the president and Vice President J.D. Vance have collectively endorsed the policy seven times this year. They are tying the initiative to broader voter concerns over economic affordability and the cost of living.
The Credit Card Competition Act
Credit card swipe fees, officially known as interchange fees, have long been a battleground between retail merchants and financial institutions. Under the current payment ecosystem, the vast majority of U.S. credit card transactions are processed through the dominant networks of Visa and Mastercard. Retailers argue that this duopoly allows banks and networks to set artificially high fees without meaningful market competition.
Last year alone, U.S. merchants paid a staggering $198.25 billion in credit and debit swipe fees, according to data from the Nilson Report. Supporters of the Credit Card Competition Act maintain that injecting routing competition into the market will force processors to lower rates. Retailers contend that these savings will ultimately trickle down to consumers in the form of lower prices.
"President Trump is right that dealing with credit card swipe fees would be one of the most effective ways to help American families," said Doug Kantor, executive committee member of the Merchants Payments Coalition and general counsel for the National Association of Convenience Stores. "Credit card swipe fees drive up costs for small businesses and prices for American families every day."
Financial Sector Opposition and Industry Concerns
While retail groups and convenience store associations have rallied behind the legislative push, financial institutions and payment networks have mounted an aggressive defense. Trade groups like the Electronic Payments Coalition represent card-issuing banks, credit unions, and payment networks. They argue that mandated routing changes will jeopardize consumer safety and convenience.
Banking representatives contend that cutting interchange fees will severely impact popular cash-back and travel rewards programs. Critics also warn that financial institutions may respond to reduced fee revenue by tightening lending standards. This would restrict access to credit for everyday consumers, particularly those with subprime credit histories.
"Credit card routing mandates would harm American consumers by limiting competition and choice, increasing the risk of fraud, threatening popular rewards programs, and reducing access to credit," said Sarah Grano, a spokesperson for the American Bankers Association. "Our highly secure and convenient payment card system should not be upended to satisfy the demands of a few corporate megastores."
Legislative Outlook Ahead of Midterms
Despite the high-profile backing from the executive branch, the path forward for the Credit Card Competition Act remains complex. The legislation has steadily accumulated bipartisan co-sponsors in the Senate. Recent months have added members such as Senators Bernie Moreno, R-Ohio, Cynthia Lummis, R-Wyo., and Angus King, I-Me. In the House, key champions include Representatives Lance Gooden, R-Texas, and Zoe Lofgren, D-Calif.
However, intense lobbying efforts by the banking lobby have reportedly spent millions to oppose the bill. Combined with divided legislative priorities in Congress, this opposition has consistently stalled its advancement. As political campaigns heat up ahead of the midterm elections, proponents hope populist pressure from voters feeling the pinch of everyday inflation will give the bill the final push it needs to break through the legislative gridlock.
Frequently Asked Questions
What is the Credit Card Competition Act?
The Credit Card Competition Act is a bipartisan bill. It would require major credit card-issuing banks with at least $100 billion in assets to allow transactions to be processed over at least two competing, unaffiliated payment networks. This avoids relying exclusively on dominant networks like Visa or Mastercard.
How much do swipe fees cost merchants?
According to the Nilson Report, U.S. merchants paid $198.25 billion in credit and debit card swipe fees last year alone.
Why do retailers support the bill?
Retailers and trade groups argue that increased competition among payment networks will lower the transaction fees merchants must pay. This helps reduce operational costs and ease price pressures for consumers.
Why are banks opposed to the legislation?
Banks and card networks argue that fee caps and routing mandates will severely degrade consumer credit card rewards programs. They also believe it will weaken anti-fraud security measures and restrict consumer access to affordable credit.
Who are the primary political sponsors of the bill?
The legislation is championed in the Senate by Senator Roger Marshall, R-Kan., and Senator Durbin, D-Ill. It has strong public backing from President Donald Trump and Vice President J.D. Vance.
