US policy shifts challenge global card payment order

Former US President Donald Trump has publicly called for a 10 percent annual cap on U.S. credit card interest rates and signaled support for the Credit Card Competition Act. The proposed actions could reshape the global card payment industry, which has long considered the U.S. its anchor market due to high transaction volumes and established business practices.

The policy proposals directly target the revenue streams from U.S. credit card balances, which exceed $1.2 trillion. A 10 percent interest rate cap could save American consumers up to $100 billion annually in interest expenses, according to some estimates. However, such a cap is expected to significantly reduce profits and benefits for banks and credit card companies. Industry leaders, including JPMorgan CEO Jamie Dimon, have warned of dramatic impacts, particularly for subprime borrowers.

Simultaneously, the Credit Card Competition Act aims to break the dominance of Visa and Mastercard in U.S. card routing. Proponents of the bill describe the two companies as a "duopoly" that imposes high interchange fees on merchants without fair negotiation. The legislation would mandate that larger banks enable at least two unaffiliated networks for card transactions, aiming to foster competition and potentially lower costs for merchants.

Visa and Mastercard, which function as payment networks rather than direct lenders, are actively pushing back. They argue that mandatory routing choices could compromise security, reliability, and consumer rewards programs. The potential for reduced credit availability and altered transaction economics poses a significant challenge to their established business models. For merchants, especially international ones selling into the U.S., this presents a crucial moment to influence the future cost structure of card acceptance, which has seen substantial fee increases in recent years.