Visa (V) and Mastercard (MA) saw their sharpest declines in six months after President Trump endorsed legislation mandating a lower-cost credit-card routing alternative, raising concerns over potential revenue erosion and structural changes to the payment processing industry.
- Visa (V) and Mastercard (MA) shares declined 6.3% and 5.8% on January 13, 2026
- President Trump endorsed legislation mandating a lower-cost credit-card routing alternative
- Current network fees generate $22B (V) and $18B (MA) annually
- Potential fee reduction of 30%–40% could erase up to $10B in combined revenue over three years
- S&P 500 Financials Index fell 1.4% on the day
- Hedge funds reduced exposure to payment processing stocks by 12% in one week
Shares of Visa and Mastercard dropped 6.3% and 5.8% respectively on January 13, 2026, marking their steepest single-day losses since mid-2025. The sell-off followed President Trump’s public endorsement of a proposed regulatory measure that would require credit card issuers to offer a federally mandated lower-cost routing option for card transactions. The policy, if enacted, would compel banks to route transactions through a government-approved alternative network, bypassing the current high-margin systems operated by Visa and Mastercard. The move threatens the core revenue engine of both companies, which generate approximately $22 billion and $18 billion annually in network fees from merchant acquirers and issuing banks. Industry analysts estimate that widespread adoption of a mandated alternative could reduce transaction fees by 30% to 40% on average, potentially shaving $10 billion in annual revenue from the combined business model of V and MA over the next three years. Financial markets reacted swiftly, with the broader financial sector's S&P 500 Financials Index falling 1.4% on the day. Institutional investors began adjusting positions, with hedge funds reducing exposure to payment processing stocks by 12% in the week leading up to the announcement. The uncertainty has also impacted fintech firms tied to payment infrastructure, with companies like Stripe and Adyen seeing their shares dip 4% and 3.5% respectively. The regulatory risk now looms large over the future of payment networks, with policy outcomes still uncertain. However, the immediate market reaction underscores investor sensitivity to any disruption of the entrenched two-tier payment system dominated by Visa and Mastercard.