Trump Backs Plan to Reduce Swipe Fees
President Donald Trump has expressed support for Senator Dick Durbin’s initiative aimed at lowering swipe fees, which currently range from 2% to 4% charged for credit card usage.
“Americans are finding it tough to afford everyday essentials like groceries and gas, and these credit card fees are contributing to already high prices,” Durbin stated.
Durbin has been advocating for the Credit Card Competition Act for several years and reintroduced it on Tuesday in collaboration with Republican Senator Roger Marshall from Kansas.
They noted that the average household spends about $1,200 annually on these fees. However, bank and credit union groups caution that the proposal might compromise transaction security and eliminate credit card rewards programs.
Jonathan Capitanini, president of Italian Village Restaurants, mentioned, “(Swipe fees) are among the largest expenses we face as a small business.” He added that last year, restaurants located in the Loop incurred over $200,000 in swipe fees.
Capitanini remarked, “When people talk about the restaurant business being a low-margin industry… for us, it’s really three cents on every dollar.”
President Trump endorsed Marshall and Durbin’s initiative via his Truth Social platform, stating, “Everyone should support great Republican Sen. Roger Marshall’s Credit Card Competition Act to stop out-of-control swipe fee rip-offs. Roger is a great senator!!!”
The proposed legislation would mandate that large banks with assets exceeding $100 billion offer at least two non-affiliated card networks, including those beyond Visa and Mastercard. These two companies dominate around 85% of the credit card market. The changes could lead to lower swipe fees but might reduce bank revenue from credit card transactions.
Additionally, Illinois has enacted legislation concerning swipe fees. Governor J.B. Pritzker signed the Illinois Exchange Fee Prohibition Act in 2024, which prohibits exchange fees on sales and tips included in receipts. However, legal challenges from banks and credit unions emerged before the law could be implemented.
Ashley Sharp, chief legal officer of the Illinois Credit Union League, commented, “[This law] would significantly disrupt the existing global payment processing system, which is currently efficient and secure for consumers and retailers alike.”
The law’s implementation has faced delays and is slated to take effect in July 2026, though legal disputes are still in progress. Opponents of the law anticipate a court ruling soon.
Sam Toia, president of the Illinois Restaurant Association, highlighted that restaurants face tough decisions about absorbing these costs or passing them on to customers.
“If an average independent restaurant, which is prevalent in Chicago, sees a pre-tax profit of only 3% to 5%, and has to pay a 2% to 4% swipe fee on each transaction, it raises serious concerns about their viability here in Chicago,” Toia noted.
Furthermore, Trump also proposed capping credit card interest rates at 10% for a year. This suggestion elicited rapid responses from Wall Street, with banking executives warning it could have more negative implications for the economy than beneficial ones.
