At a Glance
- President Trump renewed support for the Credit Card Competition Act, intensifying pressure on Visa and Mastercard
- Both stocks extended Monday losses, with Visa down 3.2% and Mastercard off 4.1% in midday trading
- JPMorgan Chase executives signaled willingness to work with the administration on payment-network alternatives
- Why it matters: The bill could erode the card networks’ dominant market share and slash their interchange-fee revenue
President Donald Trump’s backing of the Credit Card Competition Act is sending fresh shock waves through the payments sector, accelerating losses for Visa and Mastercard on Tuesday after both names posted steep declines the previous session.
The president used a morning social-media post to reaffirm his support for the bipartisan legislation, which would force large banks to give merchants a second routing option for credit-card transactions. The requirement would break the long-standing duopoly that Visa and Mastercard hold over U.S. payment processing.
Trump Doubles Down
In his post, Trump wrote that the bill will “bring competition to the credit-card industry and save small businesses billions of dollars each year.” He urged Congress to “send it to my desk immediately.”
The comments mark the second straight day the president has weighed in on the issue. On Monday he told reporters that the current system is “a rigged game” against merchants and consumers.
Visa shares fell as much as 3.4% before paring losses to trade around 3.2% lower. Mastercard slid more than 4% and remains down 4.1% in afternoon action. Both stocks posted their worst single-day drops since early March.
JPMorgan Signals Flexibility
Separately, senior executives at JPMorgan Chase told analysts on Tuesday that the bank is “prepared to adapt” if the legislation becomes law. The comments, made during a technology conference, represent a notable shift from the industry’s earlier opposition.
“We have the infrastructure to support multiple networks,” said Jennifer Piepszak, co-CEO of consumer and community banking. “If the rules change, we’ll comply and move forward.”
JPMorgan is the largest U.S. credit-card issuer by purchase volume, making its stance critical for both merchants and network operators.
What the Bill Does
The Credit Card Competition Act would apply to banks with assets above $100 billion. Those institutions would have to enable at least two unaffiliated networks on every credit card they issue.
Key provisions:
- Requires a second network option in addition to Visa or Mastercard
- Applies only to credit cards; debit-card routing rules already exist
- Lets merchants choose which network to use for each transaction
- Caps interchange fees that networks charge on the alternative route
Supporters say the measure could save merchants roughly $15 billion annually in swipe fees. The National Retail Federation called it “the most important competition bill in decades.”
Market Impact
The renewed rhetoric erased roughly $30 billion in combined market value from Visa and Mastercard over two trading sessions. Both stocks had rallied earlier this year on strong consumer-spending data and easing inflation concerns.
Analysts at Morgan Stanley cut their price targets for both companies Tuesday morning. They cited “regulatory overhang” and warned that passage of the bill could trim Visa’s earnings per share by up to 8% and Mastercard’s by 7%.
Smaller payment-network operators traded mixed. Discover Financial rose 1.1% on speculation it could gain share, while American Express slipped 0.6% because its closed-loop model exempts it from the legislation yet still faces competitive pressure.
Legislative Path
The bill has cleared the Senate Banking Committee on a bipartisan vote but has not yet received floor time. House Financial Services Committee leaders have pledged to hold hearings “soon.”
Senate Majority Leader John Thune told reporters Tuesday that the measure “has real momentum” and could be attached to a broader spending package later this year.
The White House has not specified a timeline for congressional action, though Trump economic adviser Larry Kudlow said the administration is “working the phones” to secure votes.
Industry Response
Trade groups renewed their opposition. The Electronic Payments Coalition called the proposal “a solution in search of a problem” and warned it could reduce card security by routing transactions over untested networks.
Visa said in a statement that it “remains committed to working with policymakers on solutions that benefit consumers and small businesses without disrupting a system that already provides strong protections and convenience.”
Mastercard declined to comment Tuesday, citing the pending legislation.
Key Takeaways
- Trump’s endorsement adds political momentum to a bill that stalled last session
- Stock declines show investors are pricing in a realistic chance of passage
- JPMorgan’s openness suggests large banks may prioritize compliance over continued opposition
- Merchants stand to gain billions in lower fees if alternative networks launch
The fight over credit-card routing now shifts back to Capitol Hill, where lawmakers must decide whether to prioritize the measure amid a crowded legislative calendar.
