Trump Wants to End the Credit Card Swipe Fee “Ripoff”

The credit card industry has erected a tollbooth at nearly every cash register in America – and very few people even know about it. Each time a customer buys a gallon of milk or a tank of gas with a credit card, a small piece of the sale disappears before the merchant ever receives the money

Customers rarely notice the charge because it does not appear as a line on the receipt. The merchant’s payment processor simply deducts the money and divides it among the financial companies involved. The rates are virtually all dictated by Visa and Mastercard, which together control roughly 85 percent of the credit card network market.

This is one of the most lucrative duopolies allowed in the United States. Together, these two companies can effectively fix prices and stifle competition. Neighborhood grocers, family restaurants, and gas stations have little bargaining power. They can absorb the fee and watch their already thin margins shrink or recover the expense by raising prices on customers.

The average swipe fee rate for Visa and Mastercard reached 2.36 percent last year. Multiply that charge across billions of purchases and the numbers become staggering. Merchants paid over $198 billion in 2025. The National Retail Federation estimates that these fees raise prices for the average American household by more than $1,200 every year. Few costs weigh on America’s small businesses more heavily. After rent and wages, owners often point to these fees as their single largest expense.

To address this growing problem, President Donald Trump has twice encouraged Congress to “support great Republican Senator Roger Marshall’s Credit Card Competition Act (CCCA), in order to stop the out of control Swipe Fee ripoff.” Senate Republicans should follow his leadership and pass the bill, easing cost of living pressures facing hard-working Americans.

The bill will neither cap swipe fees nor tell payment networks what they may charge. It is not a price-fixing measure. Instead, it would tackle the issue in a manner far more consistent with free market principles by creating space for competition to lower fee rates.

Under the current system, the customer’s bank chooses the network attached to the card. If the bank issues a Visa card, purchases made with that card must travel over Visa’s network. The merchant cannot shop around for a better rate. It must pay Visa’s rate or refuse the customer’s card altogether.

The CCCA would correct that imbalance by requiring banks with more than $100 billion in assets to enable at least two unaffiliated networks on each card, including one outside the Visa/Mastercard duopoly. Customers would continue using their cards as usual, but merchants and their payment system could select which network handles each transaction based on cost and quality of service.

If Visa and Mastercard want to keep the merchant’s business, they would have to compete for it. Lower processing costs would give businesses more room to reduce prices for customers and raise workers’ wages instead of sending billions more to Wall Street.

Trump’s endorsement is already changing the political calculation for the bill in the Senate. Republican Senators Cynthia Lummis of Wyoming and Bernie Moreno of Ohio recently joined as cosponsors, becoming its first supporters on the Senate Banking Committee. Independent Senator Angus King of Maine also signed on. Lummis has since called for Congress to act quickly and get the bill “passed and across the finish line.”

The banking industry has responded by spending roughly $200 million in lobbying against the reform and spreading outlandish warnings.

Its lobbyists claim that reduced swipe fee revenue could mean fewer airline miles, less cash back, and smaller rewards programs. They also warn that alternative networks would provide weaker fraud protection and that retailers might pocket the savings instead of reducing prices.

But closer examination shows these concerns are overblown.

Banks may respond to greater competition by making some rewards less generous. But that possibility exposes the weakness of their original argument. Cardholders received $47.5 billion in rewards in 2024, according to the Consumer Financial Protection Bureau, compared with the $198 billion merchants paid in card swipe fees. Additionally, Australia’s real world experience with similar reforms suggests that the CCCA would reduce rewards by less than $1 for every $1,000 charged.

Banks may shave a few pennies from some rewards programs. But if premium perks can survive only by forcing small businesses to subsidize a protected financial tollbooth, that is an indictment of the system, not the strong defense their lobbyist think it is.

In stores that charge one price to everyone, shoppers using cash, debit cards, or basic credit cards help cover the cost of premium rewards enjoyed by other customers. Airline miles are valuable, but they are not reason enough to preserve a market in which two networks dictate the terms of nearly every transaction in America.

Congress can’t guarantee that all businesses will pass along every dollar they save. But it does not need to. Again, the free market will reward those stores who lower their prices compared to their competitors. Shoppers will take notice.

Competition is not a punishment for Visa or Mastercard. It is how a free market disciplines concentrated power. No genuine conservative would defend a system that denies merchants a choice while shielding two financial giants from competition.

Republicans will hear plenty of criticisms about affordability before November. The Credit Card Competition Act gives them an opportunity to turn their free-market principles into law right before pivotal mid-term elections where GOP majorities are at stake.