Visa and Mastercard stocks declined over 5% on Tuesday. The drop followed former President Donald Trump’s public endorsement of the Credit Card Competition Act (CCCA).
The bipartisan CCCA seeks to introduce competition into the credit card processing market. It specifically aims to limit the interchange, or "swipe," fees that companies like Visa collect from merchants per transaction.
This renewed regulatory threat raised investor concerns regarding the revenue models of major payment processors. Visa was the worst-performing stock in the Dow Jones Industrial Average on the day of the decline.
If passed, the legislation would require banks to offer merchants multiple network options for processing credit card transactions. This requirement threatens to erode the dominant market position held by Visa and Mastercard.