Why Visa and Mastercard are seeing their sharpest stock drops in half a year

By Emily Bary

Investors seem jittery about Trump's support of a measure that would require a lower-cost alternative for credit-card routing

President Donald Trump mused overnight about a proposal that, if enacted, could pose challenges to Visa and Mastercard.

Visa and Mastercard may have a bigger problem than President Donald Trump's proposal to cap credit-card interest rates at 10% for one year.

The two companies run networks for payment processing, but they don't actually lend to consumers the way American Express (AXP), Capital One (COF) and Synchrony Financial (SYF) do. That means that under Trump's rate-cap scenario, the companies could see lower spending volume if lenders opt to tighten credit access. But they wouldn't have to dramatically alter their business models like the lenders might have to.

But another Trump move may be more of a threat to how Visa (V) and Mastercard (MA) operate. Overnight, the president mused about a resurrection of the Credit Card Competition Act, which would require merchants get a choice of an alternative and lower-cost credit-card routing option beyond what the two major networks offer. This already exists in the debit market.

Backers have struggled to find momentum for that bill in recent years. Now, Trump's Truth Social comments suggest the measure might see new life.

"Everyone should support great Republican Senator Roger Marshall's Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff," Trump wrote early Tuesday morning.

Visa shares fell 4.5% on Tuesday, their worst drop since a 4.9% fall on June 18, 2025, according to Dow Jones Market Data. Mastercard's stock was off 3.8%, for its worst daily performance since that same date.

"It is hard to spin the prospect of least-cost credit routing positively," William Blair analyst Andrew Jeffrey wrote on Tuesday. "Whereas we think Visa and Mastercard would move to remediate the impact, benefit from intrinsic cost advantages, retain pricing power, and have fast-growing [services] offerings, they would almost certainly take at least a transitory financial hit."

Jeffrey and his team called the CCCA "a flawed solution to what we consider the nonproblem of high card costs."

Wolfe Research analyst Darrin Peller wrote that Trump's latest comments "added incremental noise and concern" to fears around the rate-cap proposal, which itself is viewed as unlikely to be implemented.

Peller noted "consternation around the potential for an antagonistic approach towards not only issuers but broader financials despite what was believed to be a lenient regulatory environment."

But most investors "also see this as Trump's posturing to gain support for broad legislation in Congress and build momentum into the midterms without much teeth to getting these laws enacted," he continued.

-Emily Bary

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01-13-26 1710ET