Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA) are both on track for their worst week since the April 2025 tariff sell-off, with shares down roughly 4% over the past five sessions. Here’s what investors need to know.
Credit Card Competition Act Threatens Swipe-Fee Duopoly
Selling pressure ensued this week after President Donald Trump threw his support behind the Credit Card Competition Act, which would force big banks to route transactions over at least two unaffiliated networks.
That directly challenges Visa and Mastercard's near-duopoly, which currently handles about 84% of U.S. credit-card volume and helps underpin an ecosystem generating an estimated $223 billion in yearly revenue.
Goldman Sachs estimates that even a 5% shift in payment volume away from their rails could trim Visa's earnings by about 3% and Mastercard's by 1%, with further downside if interchange fees are politically pushed toward much lower international norms.
That prospect raises the risk of slower growth in Visa's dominant U.S. debit and credit franchise and in Mastercard's higher-growth cross-border and data-services segments.
Trump's 10% Rate Cap Adds Broader Regulatory Overhang
Compounding the pressure, Trump has demanded card companies cap interest rates at 10% by Jan. 20, calling current 20%–30% APRs "abuse" and warning that failure to comply would be treated as "a violation of the law" with "severe" consequences.
While Visa and Mastercard do not lend directly, investors fear this aggressive stance signals a wider crackdown on credit-card economics, from reward programs to swipe fees.
Regulatory Threat Strikes At Visa And Mastercard's High-Margin Fee Engines
Visa and Mastercard do not earn interest like banks, but they sit in the middle of nearly every card transaction, charging issuers and merchants network and assessment fees that are ultimately justified by the profitability of credit-card lending.
If regulation compresses issuers' revenue through lower APRs and forces more routing options that bypass Visa and Mastercard rails, banks will demand lower network fees, merchants will gain bargaining power on swipe costs and volume could migrate to cheaper alternative networks.
That combination threatens the high-margin, recurring revenue streams that make Visa's vast U.S. debit and credit franchise and Mastercard's premium cross-border and data-services business so profitable.
Credit Card Stocks Slide
Mastercard, Visa Price Action: According to data from Benzinga Pro, Mastercard is trading near $539, off 4.33% in five days, while Visa hovers around $328, down 4.21% over the same period.
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