Shares of Visa (NYSE:V) and Mastercard (NYSE:MA) dropped more than 5% on Tuesday, adding to recent declines after President Donald Trump renewed his focus on the credit card industry.
The sell-off accelerated after Trump publicly backed the bipartisan Credit Card Competition Act in a post on his Truth Social platform. “Everyone should support great Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff,” Trump wrote.
The proposed legislation targets the interchange, or so-called “swipe,” fees that banks and payment networks charge merchants when consumers pay by card. These fees represent a major source of revenue for payment processors and their financial institution partners.
Tuesday’s losses followed a sharp pullback the previous day, sparked by Trump’s warning that credit card issuers would be “in violation of the law” if they fail to cap interest rates at 10% for a one-year period.
If enacted, the Credit Card Competition Act would seek to open up the payments ecosystem by obliging banks to give merchants access to multiple transaction networks. Such a move could weaken the long-standing dominance of Visa and Mastercard in card processing.
Taken together, the prospect of tighter regulation on both fees and interest rates has unsettled investors, raising concerns about potential pressure on the business models of the two payment giants and keeping their shares under sustained downward pressure.