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In a Truth Social post, President Trump backed a bill called the Credit Card Competition Act (sometimes called the Durbin-Marshall credit card mandate), saying it will help put an end to what he calls "out-of-control swipe fee rip-offs." Swipe fees — more formally known as interchange fees — are the charges merchants pay every time a customer pays with a credit card. Although these fees are not directly visible to consumers, merchants often argue that they are reflected in higher prices for goods and services.
We have been following the Credit Card Competition Act for several years and have previously discussed the proposal in our blogs and podcasts.
President Trump's endorsement of the bill follows shortly after his separate Truth Social post advocating a temporary 10% cap on credit card interest rates.
What Are Swipe Fees (Interchange Fees)?
When you tap or swipe a credit card, the merchant pays a fee — often around 2-3% of the purchase price — to process the payment. That fee is generally allocated among several parties in the payment ecosystem, including:
- the credit card's issuing bank,
- the card network (like Visa or Mastercard),
- and other intermediaries in the payment chain.
What Is the Credit Card Competition Act?
At a high level, the Credit Card Competition Act is intended to introduce additional competition into the credit card network market, which proponents argue is dominated by a small number of large networks. The bill has received bipartisan attention in prior Congresses, including Vice President Vance when he as a senator. The bill was recently reintroduced with Trump's endorsement.
Here's what its supporters claim it would do:
1. Give Merchants More Choice
Right now, most credit cards can only be processed on a single network and merchants have to accept whatever network the card issuer designates.
Under the CCCA, large credit card issuers (those with more than $100 billion in assets) would have to allow merchants to choose at least one of two different payment networks for processing a credit card transaction. One network could be a major network, while the second would need to be unaffiliated with the first.
2. Force Network Competition & Reduce Network Fees
The idea is that with more than one network available on a card, merchants could pick the one with lower fees, which would lower merchants' costs of acceptance and put pressure on big card networks to reduce interchange fees to stay competitive.
3. Increase Innovation
Supporters say the bill could open the door for newer or smaller payment networks to compete, which could spur innovation and better technology in credit payments.
How Would It Affect Credit Card Banks?
Banks that issue credit cards — particularly the largest ones — stand to be directly affected:
Less Fee Revenue
Interchange fees are a major revenue source for issuing banks. If merchants have more choice and choose lower-cost networks, banks could earn less interchange fee revenue.
Impact on Rewards Programs
Many credit card rewards, like cash back and air miles, are funded partly by interchange fees. If fees fall significantly, banks might cut back on rewards or change how they structure cards to make up for lost income.
The Consumer Bankers Association, American Bankers Association, America's Credit Unions, Association of Military Banks of America, Bank Policy Institute, Community Development Bankers Association, Defense Credit Union Council, Electronic Payments Coalition, Independent Community Bankers of America and National Bankers Association issued a joint statement yesterday after President Trump expressed support for the CCCA:
"One surefire way to make life less affordable for Americans would be to pass the misguided Durbin-Marshall credit card mandate, which would harm consumers, small businesses and the community financial institutions that drive local economies. Lawmakers have rightly rejected past attempts at legislation and amendments to mandate the reengineering of the nation's trusted, resilient and efficient credit card payments system just to boost the profits of the nation's largest retailers. This Congress should again reject this harmful proposal. Anyone supporting Durbin-Marshall is voting to make credit card transactions less secure and to take away the credit card reward programs that make life more affordable for millions of Americans."
Pressure to Adjust Business Models
Banks may need to rethink pricing (annual fees, interest rates) and card features. Some analysts point to similar past reforms (like the Durbin Amendment's effect on debit card rewards) to observe how dual-network routing mandates may impact the market.
Bottom Line
President Trump's endorsement of the Credit Card Competition Act has renewed attention on swipe fees and credit card routing practices. Although the bill has been introduced in multiple prior Congresses without passage, Trump's support may increase political momentum or visibility around the issue.
The proposal does not impose a direct cap on interchange fees but instead seeks to reshape market dynamics through mandated routing changes. Whether such changes would lead to lower costs for merchants or consumers—or instead result in reduced rewards, higher fees, or other market adjustments—remains uncertain.
As with prior iterations of the legislation, the likelihood of passage and the practical effects of the proposal will depend on congressional action, industry response, and how market participants adapt if the bill advances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
