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Finance

Interchange Under Fire: What a Federal Swipe-Fee Cap Means for Visa and Mastercard

Congress and the White House are circling the revenue engine that makes V and MA two of the most profitable companies on earth — and the pressure is no longer theoretical.

Image: Money Racket
By at Money Racket · May 27, 2026

The Credit Card Competition Act of 2026 is back, reintroduced with bipartisan sponsors and an endorsement from the Trump White House, which called swipe fees an "out of control ripoff." The mechanism is surgical: force any bank with $100 billion or more in assets to enable at least two unaffiliated payment networks on every credit card it issues. That single mandate breaks the routing monopoly that Visa and Mastercard have spent decades cementing. Where merchants today have no choice but to send a transaction over Visa's rails if the card says Visa, the bill would open a second lane — and a price war.

This is not the same as a hard-dollar cap on interchange, but it is the on-ramp to one. The Durbin Amendment did exactly this for debit in 2010: routing competition compressed debit interchange from an average of 44 cents to a regulated 21 cents per transaction. The Fed has since proposed reducing that cap further, to roughly 14.4 cents. Congress is now trying to replay that tape for credit, where average U.S. interchange runs around 1.8 percent with no federal ceiling. For two companies whose entire business model is a percentage of every swipe, that ceiling matters.

For two companies whose entire business model is a percentage of every swipe, a federally mandated second network on every credit card is not a nuisance — it is a structural ceiling on the most profitable toll road in American finance.

Who cashes in:

FI (Fiserv, ticker: FISV) owns the Star and Accel debit networks, which already have issuer-processor relationships with banks outside the top four. If the CCCA passes, Fiserv becomes a natural second network on credit cards — capturing routing volume currently locked behind the Visa/Mastercard duopoly. FIS (FIS) similarly owns the NYCE network and has the technical infrastructure to compete for that secondary-network slot. Both companies stand to absorb meaningful transaction volume without building anything new.

Large-format retailers that run thin margins on high transaction volumes — think warehouse clubs and grocery chains — are structural beneficiaries of any per-swipe cost compression. Companies like COST (Costco) and WMT (Walmart), which process enormous card volumes and have historically pushed hardest for interchange relief, would see operating cost tailwinds if effective interchange rates fall toward debit-era levels.

Who is exposed:

V (Visa) and MA (Mastercard) are the obvious casualties. Neither company collects interchange directly — that flows to card-issuing banks — but both collect network assessment fees on every transaction that crosses their rails. Routing competition compresses volumes; mandated network access deflates the premium that comes from being the only game in town. Visa's fiscal 2025 revenue crossed $40 billion; any sustained compression of U.S. network fee revenue would pressure a multiple that already prices in near-monopoly economics.

Large card issuers like JPM (JPMorgan) and BAC (Bank of America), whose consumer banking units generate billions in interchange income annually, face the same dynamic the Durbin Amendment created for debit: regulatory compression of a fee line with no clean offset. Both banks responded to debit Durbin by eliminating free checking accounts and scaling back rewards — moves that won't play well the second time.

What to watch:

The CCCA's sponsors have signaled they will seek a vehicle in a larger legislative package. Watch for any reconciliation or must-pass spending bill as a potential attachment point. The Fed's proposed debit cap update — from 21 cents to 14.4 cents — is also moving through rulemaking independently and sets the political temperature for how far regulators are willing to push. If both tracks advance simultaneously, the pressure on V and MA is compounding, not sequential.

Source: original report ↗

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