Updated 11/12/2025
The Credit Card Competition Act — What Small Business Owners Should Know
If you run a small business, you already know how much swipe fees can eat into your profits every time a customer pays with a credit card. The Credit Card Competition Act is a proposed law that aims to give business owners like you more choice — and potentially lower those costs.
Here’s how it works:
When a customer uses a credit card, the bank that issued the card pays you, and the customer later pays their bank. But that payment doesn’t go straight from the bank to your account — it travels through a payment network like Visa, MasterCard, American Express, or Discover.
Those networks charge you interchange fees (also called swipe fees) for each transaction. Right now, if you accept a certain card — say, Visa — you’re locked into using Visa’s network and paying whatever fees Visa sets.
That’s a big deal, because Visa and MasterCard dominate the market. Together they handle about 80% of credit card transactions, which means small businesses have little to no leverage when it comes to negotiating rates.
The Credit Card Competition Act would change that by requiring large banks to enable at least one more payment network on their credit cards. In plain terms, that means you could choose a different, possibly cheaper network to process each credit card payment — not just the one printed on the customer’s card.
What this could mean for your business:
- Lower costs: More competition between networks could bring down swipe fees.
- More control: You’d have a say in how your credit card payments are processed.
- Better margins: Savings on fees could go straight back into your business — whether that’s higher profits, lower prices, or better pay for your team.
At its core, the Credit Card Competition Act is about giving small businesses a fair shot — by opening up competition and reducing the grip of the biggest players in the credit card industry.
Resources:
How the Credit Card Competition Act of 2023 Could Affect Consumers, Merchants, and Banks a report from the nonpartisan Congressional Research Service.
Small Business Owners Call Out Exorbitant Swipe Fees at Small Business Rising
The Merchants Payments Coalition supports the legislation, saying it will make fees paid by retailers more transparent and competitive, could lead to lower prices, and doesn’t have to affect credit card rewards programs. It explains its stance at the Merchants Payments Coalition website.
S.1838 – Credit Card Competition Act of 2023
H.R.3881 – Credit Card Competition Act of 2023
Related:
Visa and MasterCard reach swipe fee settlement with merchants
November 11, 20254:20 PM ET
Visa and Mastercard say they’ve reached a deal to resolve a long-running battle with businesses over “swipe fees.” But retailers and restaurants say it doesn’t go far enough.
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