The Credit Card Competition Act: A Deep Dive into Its Implications

Dan Nicholson

The financial landscape is on the brink of a significant shift with the introduction of the Credit Card Competition Act. This proposed legislation, led by Sen. Dick Durbin, targets the credit card industry, particularly the swipe fees associated with transactions. But what does this mean for stakeholders, and how might it reshape the industry?

What is The Credit Card Competition Act?

The primary aim of the Credit Card Competition Act of 2023 is to foster competition, alleviate merchant transaction costs, and reduce the financial strain on businesses and consumers. The backdrop to this legislation is the growing unease about the significant influence of major credit card companies, whose market dominance has raised concerns about potential anti-competitive practices, limited choices for merchants and consumers, and thigh transaction fees repercussions.

Challenging Visa and Mastercard's Dominance

According to the bill summary, Visa and Mastercard control 80% of U.S. credit-card payments. By challenging the Visa-Mastercard duopoly, the act might also pave the way for reduced merchant fees.  For example, according to Merchant Payments Coalition, retailers, restaurants, small businesses, and consumers could collectively save up to $15 billion annually.  


However, there are concerns. Major airlines, especially United and Delta, worry about the potential decline or end of rewards programs, which are significant revenue sources. If Visa and Mastercard pull back, these partnerships could be jeopardized, affecting both airline revenues and consumer satisfaction.

“It will kill debit-card rewards programs when it happens, and I think it's a bad policy,” said United Airlines CEO Scott Kirby at the October 18th earnings call for United. 

The Direct Impact on Airlines and Merchant Transactions

If the act passes, it could trigger immediate changes. Merchants could enjoy financial relief from reduced swipe fees, but their relationship dynamics with credit card companies might evolve. Consumers, on the other hand, may witness changes in rewards programs, influencing their loyalty to specific credit cards or airlines.  

In the long run, the act could redefine the credit card industry. A potential shift in power dynamics might see smaller credit card providers gaining more influence. The U.S. credit card market might also mirror the European Union's, where capped fees and loyalty programs coexist. Amid these changes, innovation will be crucial, pushing both airlines and credit card companies to develop new strategies to offer value to consumers.


The Credit Card Competition Act, if passed, could reshape the credit card industry, bringing both opportunities and challenges.  The act aims to level the playing field and benefit a broader spectrum of stakeholders. However, only time will reveal its real-world implications. 


Business Insider

Merchant Payments Coalition

Credit Card Competition Act of 2023 Bill Summary 

Dan Nicholson is the author of “Rigging the Game: How to Achieve Financial Certainty, Navigate Risk and Make Money on Your Own Terms,” deemed a best-seller by USA Today and The Wall Street Journal. In addition to founding the award-winning accounting and financial consulting firm Nth Degree CPAs, Dan has created and run multiple small businesses, including Certainty U and the Certified Certainty Advisor program.

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