Credit card fee reform battle continues in Congress.

Senators Roger Marshall and Dick Durbin's Credit Card Competition Act failed to advance, sparking a battle between retail and merchant interests and banks and card networks over credit card fees. The senators aim to inject competition into an industry dominated by Visa and Mastercard by requiring bank card issuers to offer an alternative network. Bank card issuers and card networks argue these fees pay for security and loyalty programs. The dispute highlights the strength of the card industry, as credit cards remain consumers' preferred payment option 35% of the time.

The U.S. Senate recently passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025 without allowing debate on amendments, including the Credit Card Competition Act (CCCA). The CCCA, a bipartisan legislation, aimed to drive down high swipe fees in the credit card processing market by introducing competition [1].

The National Restaurant Association expressed disappointment with the Senate's decision, stating that the CCCA could have improved the GENIUS Act by addressing crucial issues such as credit card processing costs. Sean Kennedy, Executive Vice President of Public Affairs for the National Restaurant Association, highlighted that credit card processing is the third-largest operating expense for restaurants, behind food and labor [1].

The CCCA sought to lower swipe fees, improve credit card security and service, and save U.S. businesses and consumers an estimated $16 billion annually [1]. However, the lack of amendments means these benefits remain out of reach for now.

Meanwhile, credit card companies are exploring new revenue sources. Kookmin Card, for instance, is building KB Pay 3.0 infrastructure to integrate distributed systems and implement an optimized non-face-to-face personalized marketing system [2]. This move aims to secure new revenue streams as profits from reduced merchant fees decline.

The debate over the CCCA underscores the strength of the card industry, with credit cards remaining consumers' preferred payment option 35% of the time. The battle between retail and merchant interests and banks and card networks highlights the industry's entrenched power structures and the challenges in introducing competition [3].

In the broader context, Visa Inc. (V) and Mastercard Incorporated (MA) dominate the global digital payments landscape, with Visa boasting superior operating margins and a stronger dividend yield compared to Mastercard [3]. Both companies are exploring stablecoins and blockchain infrastructure to future-proof their businesses, reflecting the evolving payments technology landscape.

References:
[1] https://restaurant.org/research-and-media/media/press-releases/national-restaurant-association-statement-on-the-senate-forgoing-an-amendment-process-on-the-credit/
[2] https://www.mk.co.kr/en/economy/11341639
[3] https://finance.yahoo.com/news/battle-payment-giants-visa-mastercard-151700042.html