COMMENTARY: Trump’s Revival of the CCCA Is Bad News for the Big Networks—And for Market Rates

The Credit Card Competition Act (CCCA) was dead in the water. Most of Congress would have preferred to leave it that way, avoiding a vote in which they would have to take sides between two powerful interests: banks and merchants.

But President Trump, with a single Truth Social post on Tuesday endorsing the CCCA and decrying “out-of-control swipe fee rip-offs,” breathed new life into the bill.

While it will still be a hard lift to get 60 votes in the Senate, the political winds have shifted violently. Trump has forced Majority Leader John Thune’s and Speaker Mike Johnson’s hands. They will likely have to let the CCCA get a vote before the midterms.

The bill targets politically unsympathetic credit card issuers with more than $100 billion in assets, like BofA, Chase, Citi, and Capital One, as well as the leading open credit card networks Mastercard and Visa. Supporters hope it will provide merchants a powerful tool to ratchet down credit card interchange and network fees.

It would fundamentally change the nature of network-routing competition. Covered credit card issuers would have to provide merchants a choice of two networks on each card, both of which could not be Mastercard and Visa.

There are four well-established national credit networks— American Express, Discover, Mastercard, and Visa. Additionally, processing colossi Fiserv’s and FIS’s debit networks have dual-message capability that could route credit card transactions.

While networks could differentiate themselves with better risk management, promotions generating incremental sales, or a bundling of agentic AI enablement, most transaction routing in the near term would be determined by net variable interchange and network fees. Network fees would be most exposed. All networks’ marginal routing costs are zero.

American Express’s third-party credit card business is small, Discover’s is de minimis, and neither Fiserv nor FIS has any. They wouldn’t have much, if anything at all, to lose by slashing acquirer fees to win routing. However, leveraging greater network scale and a broader suite of services, and also drawing on other less-exposed fees, Mastercard and Visa could and would aggressively contest every transaction.

Merchants wouldn’t lose sales by routing over the cheaper network. The more expensive network would earn no variable acquirer or issuer fees. That would establish a slippery slope on which network acquirer fees plummeted.

To be sure, there would be pressure on credit card interchange fees as well. Supporters—disingenuously—suggest the reduction would be modest, when they actually hope credit interchange fees will be eviscerated. Opponents warn credit interchange fees would be gutted, and therefore the rich reward programs cardholders love would be destroyed.

In practice, as long as issuers have more than two credit networks to choose from, they could defend interchange fees. They wouldn’t enable a second network that wouldn’t commit to not cutting interchange fees. Unless the issuer was asleep at the switch, the moment the second network started to cut interchange fees, it wouldn’t be the second network. The greater the number of credit networks competing, the greater would be issuers’ ability to hold the line on interchange fees.

The steady state would be one in which enabled networks’ interchange fees were the same or close. If one network had appreciably higher interchange fees, it wouldn’t win any transactions.

America’s credit card market works extraordinarily well for consumers and merchants. They take it for granted. Credit-card-issuing giants and Mastercard and Visa have let critics pillory them and frame the narrative. They’ve failed to make an effective affirmative case in the public arena with cardholders (voters) for the value they deliver. They may now pay a steep price.

—Eric Grover is principal at Intrepid Ventures