Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA) have encountered notable stock price declines over the last five trading sessions, with each company seeing share prices fall by approximately 4%. This marks their most substantial weekly decrease since the tariff-related sell-off experienced in April 2025. Investors are closely monitoring the developments as the credit card giants face intensified scrutiny and proposed regulatory changes that could disrupt their established revenue models.
The jitters in the market surfaced prominently after President Donald Trump publicly voiced support for the Credit Card Competition Act. This legislation aims to dismantle the current near-monopoly held by Visa and Mastercard by mandating that large banks facilitate card transactions through at least two unaffiliated networks. Presently, Visa and Mastercard control roughly 84% of US credit card transaction volume, a dominance that contributes significantly to an interconnected system generating an estimated $223 billion annually in revenue.
According to analyses from Goldman Sachs, a shift of even 5% in payment volumes away from Visa and Mastercard's networks could lead to earnings reductions of about 3% for Visa and 1% for Mastercard. The financial consequences could deepen if lawmakers pursue lowering interchange fees to levels common internationally. This regulatory pressure poses risks to Visa’s substantial US debit and credit franchises and to Mastercard’s rapidly growing cross-border payment and data service segments, potentially dampening their growth trajectories.
Compounding these challenges, President Trump has advocated for capping credit card interest rates at 10% by January 20. He sharply criticized the prevailing rates, which range between 20% and 30% Annual Percentage Rates (APRs), labeling them as exploitative. Trump warned that failure to adhere to these proposed limits would be regarded as legal violations carrying severe repercussions. Although Visa and Mastercard do not engage in lending and thus do not earn interest income firsthand, investors interpret this directive as indicative of a broader crackdown that could impact various aspects of credit card economics, including rewards programs and swipe fee structures.
Visa and Mastercard function primarily as intermediaries in card payments, earning revenue through network and assessment fees charged to card issuers and merchants. These fees are justified by the profitability of credit card lending, primarily borne by banks. Should regulations succeed in compressing bank revenue via lower APRs and impose multiple transaction routing competitors, the resulting dynamics could pressure network fees, bolster merchants' bargaining power over swipe fees, and cause transaction volumes to shift towards less costly alternative networks.
This confluence of factors threatens the high-margin and recurring revenue streams that underpin Visa’s dominant US debit and credit business and Mastercard’s premium cross-border and data-driven services. The potential for reduced frequency and volume of transactions on Visa and Mastercard’s networks threatens to erode profitability, raising investor concerns about future earnings stability and growth prospects.
Market data from Benzinga Pro reflects these concerns, showing Mastercard shares trading near $539, down approximately 4.33% over five sessions, while Visa shares have dipped to around $328, marking a 4.21% decrease during the same period. These price movements underscore the market's reaction to the combined regulatory pressures and the unsettled landscape facing these payment leaders.
Investors and market observers are advised to monitor ongoing legislative developments and executive actions that could further affect the economics of card payments. The evolving regulatory environment represents a substantial risk factor for Visa and Mastercard, companies traditionally characterized by strong pricing power, resilient input cost pass-through capabilities, and disciplined management. The uncertainty surrounding future fee structures and competition could challenge these attributes.