Payment Intelligence Series  |  IntelliPay

The CCCA Has Failed Again.

Here Is Why Merchants Should Stop Waiting for Congress and Start Saving Money Now

A Bill Four Years in the Making. Still Waiting.

The Credit Card Competition Act first appeared in Congress in 2022. Sen. Dick Durbin, a Democrat from Illinois, and Sen. Roger Marshall, a Republican from Kansas, introduced it together. The pitch was simple: require banks with more than $100 billion in assets to make at least one credit card routing network available to merchants that is not Visa or Mastercard. By injecting routing competition into a market those two networks have dominated for decades, the sponsors argued, interchange fees would face downward pressure over time.^[1]

That was a reasonable idea in 2022. It is still a reasonable idea in 2026. It is also, for the fourth consecutive year, an idea that has not become law.

The January 2026 reintroduction came with something new: an explicit endorsement from President Trump, which gave the bill a bipartisan quality it had never quite had before.^[2] Sens. Durbin and Marshall moved quickly, attempting to attach the CCCA as an amendment to a major Senate housing bill. It looked like one of the more plausible paths the legislation had ever had.

The Senate passed the housing bill in March 2026. The CCCA was not included.^[5]

A spokesperson for Sen. Durbin confirmed the outcome and said the effort would continue. That is the same message that has come after every previous failed attempt.

Why the Bill Keeps Stalling

Understanding why the CCCA has failed repeatedly is worth a few minutes, because it shapes how you should think about the odds going forward.

The opposition is well-funded and structurally entrenched. Visa and Mastercard process the vast majority of U.S. credit card transactions. The large banks that issue those cards collect a substantial share of interchange revenue. All of them have strong financial and lobbying incentives to keep the current structure in place.^[3]

The rewards argument works on voters. The most effective consumer-facing argument against the CCCA is that lower interchange revenue will force banks to cut credit card rewards programs. This is not a made-up concern. After the Durbin Amendment capped debit interchange in 2010, several banks did reduce or eliminate debit rewards. The threat to credit rewards is real enough to generate constituent pushback on legislators who might otherwise support the bill.

Smaller institutions have concerns too. Credit unions and community banks below the $100 billion threshold are technically exempt from the CCCA. But their trade groups argue that compressed interchange margins across the industry will accelerate consolidation and hurt smaller lenders. Their opposition complicates the bill's coalition-building.

None of this means the CCCA will never pass. Presidential support is genuinely unusual for financial regulation legislation and may eventually create the conditions for movement. But four years of failure suggests merchants should treat congressional action as a scenario to monitor, not a strategy to depend on.

What Four Years of Failure Actually Tells Merchants

Here is the part that does not get covered enough. While Congress has debated and deferred on the CCCA, the actual landscape for merchant fee recovery has quietly gotten better. Card networks rewrote their own rules. States updated their surcharge laws. And a generation of payment processors built compliant, transparent programs that give merchants real options right now.

Consider the numbers. According to the Nilson Report, U.S. merchants paid a record $187.20 billion in card processing fees in 2024.^[4] The average blended Visa and Mastercard cost runs around 2.35 percent per transaction, but many small businesses on flat-rate pricing are paying 2.9 percent or higher. That gap between what you are currently paying and what you could be paying is recoverable today. Not next session. Today.

Visa quietly expanded service fee eligibility in 2025. Kansas legalized credit card surcharging in January 2025. The Illinois legislature passed restrictions on interchange fees for taxes and tips. The regulatory floor under merchant fee-recovery programs is broader and more solid than it has ever been, independent of what Congress does.

State-Level Action: Where Things Are Actually Moving

While the federal debate sits still, state-level interchange legislation is actively reshaping rules for merchants. Here are the key developments worth tracking.

Illinois: The Interchange Fee Prohibition Act

Illinois passed the Interchange Fee Prohibition Act, which prohibits card networks from charging interchange fees on the tax and tip portions of transactions. For restaurants, retailers, and government agencies where a meaningful share of every transaction is sales tax, this would represent real dollar savings.^[6]

The law is currently blocked by a federal district court injunction while litigation continues. The Seventh Circuit Court of Appeals is hearing the case on an expedited schedule in 2026. If the Seventh Circuit upholds the law, other states are likely to follow quickly. If it strikes it down, the issue gets pushed back to Congress, adding pressure to the CCCA debate.

Kansas: Surcharging Now Legal

Kansas had banned credit card surcharges for decades. House Bill 2247 changed that, taking effect January 1, 2025. Kansas merchants can now add a surcharge to credit card transactions equal to their actual processing cost, subject to disclosure requirements and card brand rules.^[7]

Regulation II: The Debit Wild Card

A federal district court vacated Regulation II in 2024, the Federal Reserve rule that capped debit card interchange at 21 cents per transaction under the 2010 Durbin Amendment. The court ruled the Fed had set the cap too high. The court then stayed its own ruling pending appeal, so the 21-cent cap still applies for now. If the Eighth Circuit upholds the vacatur, debit interchange fees could rise. Merchants who benefit from debit routing competition today should watch this case.^[8]

What You Can Do Right Now. No Legislation Required.

The most important shift in payment processing strategy over the past five years has nothing to do with federal legislation. It is the maturation of compliant, transparent fee-recovery programs that let merchants stop subsidizing card acceptance entirely, or substantially reduce that cost, starting today.

Dual Pricing

Dual pricing shows two prices at the point of sale: one for cash or ACH, one for card. The difference reflects the actual cost of card acceptance. This model is compliant with Visa and Mastercard rules, legal in all 50 states, and requires no surcharge disclosure signage beyond the posted price display. Merchants who implement dual pricing correctly effectively bring their net card processing cost to zero. It is the cleanest and lowest-friction fee-recovery model currently available.

Credit Card Surcharging

Surcharging lets you add a fee to credit card transactions equal to your actual processing cost, up to 3 percent for Visa and 4 percent for Mastercard. Surcharging is now legal in 45 or more states. It cannot be applied to debit or prepaid cards. Visa requires you notify your acquirer/processor 30 daysbefore you implement a surcharge program, plus specific disclosure signage at the point of entry and point of sale. State requirements vary, so work with your processor to confirm your compliance setup before going live.

Service Fee Programs for Government Agencies and Utilities

Government agencies and utilities can use service fee programs where a compliant third-party processor collects a clearly disclosed service fee from constituents or customers who pay by card. The agency receives 100 percent of the amount owed. IntelliPay acts as the third-party payee in these transactions, collecting the service fee and applying it to cover processing costs. This model is fully compliant with card brand rules when properly structured and is designed specifically for the public sector.^[9]

Interchange-Plus Pricing

For merchants who prefer to absorb processing costs, switching from flat-rate to interchange-plus pricing typically reduces your effective processing rate by 20 to 40 percent. Flat-rate pricing bundles interchange, network fees, and processor margin into one opaque number. Interchange-plus separates those components, passing actual interchange through at cost with a fixed, transparent processor markup. If you are on flat-rate pricing and you have not had a statement review in the last 12 months, you are very likely leaving money on the table.

ACH and Account-to-Account Payments

ACH transfers carry far lower processing costs than credit cards, typically a flat fee of $0.25 to $1.50 per transaction rather than a percentage of the sale. For high-value transactions, recurring billing, B2B payments, and utility or government collections, making ACH a visible and easy option for customers is one of the most direct ways to reduce your effective processing cost. This works right now, regardless of what happens to interchange rates at the federal level.

The Rewards Argument: An Honest Look

Every time the CCCA comes up, the banking industry raises the prospect of consumers losing their credit card rewards. It is worth engaging with this directly, because it affects how your customers might perceive a surcharge or dual-pricing program.

The argument has some real basis. After the Durbin Amendment reduced debit interchange in 2010, several banks did cut debit card rewards programs. The concern that credit rewards could follow the same path under the CCCA is not manufactured.

What the argument leaves out is that the United States has some of the highest credit card interchange rates in the developed world, typically two to four times the rates in Europe and Australia, where competitive credit card markets with meaningful rewards programs exist at lower interchange levels. The claim that U.S. rewards programs cannot survive at lower interchange rates is hard to reconcile with the experience of every other major economy.

For merchants, the practical question is a little different anyway. If rewards programs do erode over time, consumer payment behavior will shift toward debit, digital wallets, ACH, and buy now, pay later options. All of those carry lower interchange costs. Merchants who already accept a diverse range of payment methods will be better positioned for that shift than those who are exclusively dependent on credit card acceptance.

A Practical Checklist for Merchants

• Find out your actual effective processing rate. If you are on flat-rate pricing, ask for a statement review. The gap between your current rate and interchange-plus pricing is likely larger than you expect.
• Evaluate whether a fee-recovery program fits your business and customer base. Dual pricing, surcharging, and service fee programs each work better in different contexts. Talk through the options with your processor.
• Check the current surcharge laws in every state where you operate. The regulatory map has shifted significantly in the past 12 months.
• If you serve Illinois customers, track the Seventh Circuit decision on the Interchange Fee Prohibition Act. The outcome will matter for state-level interchange regulation nationally.
• Ask your payment processor what happens if Regulation II is overturned. Understand how your debit card processing costs might change and what routing options you would have.
• Expand the payment options you accept. ACH, digital wallets, and other lower-cost methods reduce your effective processing costs and give you flexibility as the regulatory environment continues to shift.
• Review your terms of service and payment disclosures. If you implement a surcharge or dual-pricing program, your disclosures need to meet card brand requirements and state law in every jurisdiction where you operate.
• Ask your processor specifically about routing options. Even before the CCCA, some processors already offer access to multiple card networks for certain transaction types. You may have routing flexibility you are not currently using.

Frequently Asked Questions

Sources and Citations