Credit Card Industry Spends $200 Million to Block Bipartisan Bill Restructuring Swipe Fees

The financial services industry has mounted one of the most expensive lobbying campaigns in modern Washington history, spending approximately $200 million to block a bipartisan bill aimed at restructuring credit card swipe fees. According to a comprehensive new report from the advocacy group Demand Progress, the massive financial deployment is designed to protect a highly lucrative system that generated a record $198.25 billion in fee revenue in 2025 alone.[1][2]

The target of this unprecedented spending is the Credit Card Competition Act (CCCA), a piece of legislation that threatens to dismantle the long-standing duopoly held by Visa and Mastercard. The bill has sparked a fierce, high-stakes battle between a coalition of retailers and consumer advocates on one side, and the nation's largest banks and payment networks on the other.[1][3]

At the center of the fight is the "swipe fee"—also known as an interchange fee. Every time a consumer taps or inserts a credit card at a checkout terminal, the merchant does not receive the full purchase amount. Instead, a percentage of the sale, typically between 2% and 3.5%, is deducted and distributed among the payment network and the bank that issued the card.[1][6]

While these fees are largely invisible to the consumer at the point of sale, they act as a hidden tax on the broader economy. Because merchants operate on tight margins, they routinely raise the shelf prices of their goods and services to account for the cost of processing credit cards.[4]

The cumulative impact of these price increases is staggering. The National Retail Federation estimates that swipe fees cost the average American household approximately $1,200 annually in higher prices, regardless of whether they pay with a credit card, debit card, or cash. As inflation has driven up the nominal cost of goods, the percentage-based swipe fees have automatically increased in tandem, creating a compounding burden on consumers.[2][4]

The mechanics of the current system heavily favor the payment networks. Visa and Mastercard collectively control over 80% of the United States credit card market, encompassing more than 576 million active cards. Because of this overwhelming market dominance, the two networks are able to centrally fix the swipe fees that merchants must pay.[6]

For retailers, the system operates on a strict "take-it-or-leave-it" basis. If a grocery store or gas station wants to accept Visa or Mastercard—a necessity for survival in the modern retail landscape—they must agree to the networks' non-negotiable fee structures. There is currently no mechanism for merchants to shop around for a cheaper processing route for a specific credit card transaction.[4][6]

The Credit Card Competition Act proposes a structural remedy to this lack of choice. The legislation would require the largest credit-card-issuing financial institutions—specifically those with over $100 billion in assets—to enable at least two unaffiliated routing networks on every credit card they issue.[1][6]

Crucially, the bill mandates that at least one of those two networks must be an entity other than Visa or Mastercard. By forcing mega-banks to offer an alternative processing route, the legislation aims to introduce free-market competition into the payment ecosystem. Merchants would finally have the ability to choose the network that offers the best combination of low fees and high security for each transaction.[3][6]

Proponents of the bill point to a successful historical precedent. In 2010, Congress passed similar reforms for the debit card market, requiring multiple routing options for debit transactions. That reform fostered innovation, increased competition among alternative networks, and ultimately saved merchants and consumers billions of dollars without breaking the payment system.[4][6]

Recognizing the existential threat to their profit margins, the banking and payments industry has mobilized a massive defense. The Electronic Payments Coalition (EPC), an umbrella lobbying group representing major banks and card networks, has spearheaded the $200 million effort to defeat the CCCA.[1][2]

The Demand Progress report details how this financial firepower has been deployed across multiple fronts. Beyond traditional campaign contributions and direct lobbying of lawmakers, the industry has funded aggressive digital advertising campaigns and bankrolled proxy organizations to create the illusion of grassroots opposition.[2][3]

One prominent example highlighted by researchers is the "Small Business Payments Alliance." While the group presents itself as a coalition of independent mom-and-pop shop owners concerned about the legislation, disclosures reveal it is a project managed by a New York public relations firm and funded by the EPC. Several of the group's most visible small-business spokespeople had previously received undisclosed grants or sponsorships from major credit card issuers.[2][3]

The industry's most potent public argument against the CCCA centers on credit card rewards. Opponents claim that if banks are forced to compete on routing fees, their swipe fee revenue will plummet, forcing them to eliminate the popular cash-back, points, and airline miles programs that millions of consumers rely on. To amplify this message, the industry has even engaged popular travel and rewards websites to rally consumers against the bill.[1][3]

Retailers and reform advocates dismiss the rewards threat as a manufactured scare tactic. They note that the projected $15 billion to $17 billion in annual savings generated by the CCCA represents less than 10% of total swipe fee revenues. With major card-issuing banks operating on profit margins of roughly 30%, proponents argue the institutions have more than enough capital to maintain rewards programs and stay competitive in the consumer market.[4]

International evidence also undercuts the industry's warnings. When Australia implemented strict swipe fee reforms a decade ago, Visa and Mastercard similarly warned that rewards programs would vanish. Instead, the Reserve Bank of Australia found that banks continued to offer significant rewards to attract customers, while also lowering interest rates—a move that provided a more substantial financial benefit to the average consumer.[4]

The battle over swipe fees is also playing out in state legislatures. In Colorado and Illinois, lawmakers recently passed bills attempting to ban swipe fees from being applied to the sales tax portion of a transaction. The banking industry immediately launched heavy lobbying and litigation efforts to block the state-level laws, arguing that separating the tax from the purchase price at the point of sale is technologically unfeasible.[5]

Despite the intense industry opposition, the federal Credit Card Competition Act continues to build momentum through an unusual bipartisan coalition. The bill is championed by progressive Democrats like Senator Dick Durbin and conservative Republicans like Senator Roger Marshall and Vice President JD Vance. In January 2026, the legislation received a significant boost when President Donald Trump publicly endorsed it, calling on Congress to "stop the out of control Swipe Fee ripoff."[1][2]

As the legislative session progresses, lawmakers are exploring creative avenues to pass the reforms. Recent efforts have focused on attaching the CCCA as an amendment to larger, must-pass financial packages, such as the proposed GENIUS Act governing cryptocurrency stablecoins. With $200 million already spent and billions more on the line, the fight over how America pays for its purchases is far from over.[1][2]