The bill could upend the system that moves billions of dollars in fees that merchants hate and banks use to power rewards. With Trump as an ally, the legislation targeting interchange fees gains momentum, threatening the financial model behind credit card rewards programs. Merchants have long argued that these fees inflate consumer prices, while banks rely on them to fund cashback and travel perks.
If passed, the bill would cap the fees banks charge merchants for processing transactions, potentially reducing revenue streams that support popular rewards cards. This shift could reshape consumer spending habits and force banks to rethink their credit card strategies. The debate pits small businesses against large financial institutions, with policy implications for market competition and consumer choice.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing