This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Mastercard’s CEO announced that the card network has renegotiated a new services agreement with Capital One Financial, dispelling some questions about the future of its ties to that bank after its acquisition last year of rival Discover Financial Services. The new pact may even hand some additional credit card work to Mastercard, according to comments from Masterc ...

By Arasu Kannagi Basil Jan 20 (Reuters) - U.S. Bancorp CEO Gunjan Kedia warned on Tuesday that President Donald Trump's proposed 10% cap on credit card ​interest rates would significantly impact its clients and the broader economy, echoing concerns ‌raised by the banking industry. "Our estimate is that 90 plus percent of our clients will see a ‌detrimental impact if there was an across-the-board 10% rate cap on credit cards. The impact to 50% of the clients will be crushing, as it will be for the economy ...

Core Viewpoint - Visa is facing regulatory pressures that could impact its business model, particularly concerning swipe fees, but its strong fundamentals and growth prospects continue to attract positive analyst sentiment. Financial Performance - Visa reported fiscal 2025 GAAP net income of $20.1 billion ($10.20 per share) and non-GAAP net income of $22.5 billion ($11.47 per share), with net revenue of $40 billion, reflecting an 11% to 12% increase on a constant-currency basis [7] - In fiscal Q4, Visa achieved a GAAP profit of $5.1 billion ($2.62 per share) and a non-GAAP profit of $5.8 billion ($2.98 per share) on $10.7 billion of revenue, also up approximately 11% to 12% [7] - The company generated $6.1 billion in buybacks and dividends in the quarter, totaling $22.8 billion for the full year, supporting its premium valuation [7] Market Position and Valuation - Visa trades at about 26.8x forward earnings, significantly higher than the sector average of 11.5x, indicating its strong market position and growth outlook [2] - Despite a 3.6% increase over the past 52 weeks, Visa's stock is down approximately 6.3% year-to-date due to regulatory concerns [2] Regulatory Environment - The endorsement of the "Credit Card Competition Act" by President Trump has introduced new regulatory risks, potentially affecting Visa's swipe fee structure [6] - The proposed legislation could force large banks to offer merchants lower-cost routing options, challenging Visa's economic model [4] Analyst Sentiment - Analysts expect Visa's earnings for the upcoming quarter to be $3.14 per share, representing a 14.18% year-over-year growth [12] - Major firms like Bank of America and HSBC have upgraded Visa's stock to "Buy," citing strong fundamentals and growth potential despite regulatory risks [13][14] - The consensus among analysts is a "Strong Buy" rating, with a mean price target of $403.09, suggesting a potential upside of about 22.5% from current levels [14] Strategic Initiatives - Visa is collaborating with Fiserv to enhance its payment solutions, integrating AI-driven commerce capabilities to improve transaction processes for merchants [8][9] - The company is also expanding its real-time payment capabilities through partnerships like Lumanu, targeting creator and contractor payouts globally [11]

Core Insights - The earnings season commenced with the four largest U.S. banks reporting mixed results, leading to a decline in their stock prices by 5% to 7% due to concerns over a proposed political measure [1][2][8] Group 1: Earnings Performance - JPMorgan Chase and Bank of America exceeded both revenue and earnings estimates, while Citigroup and Wells Fargo surpassed earnings but fell short on revenue [2] - Despite some business lines underperforming, the diversified nature of these banks allowed strengths in other areas to offset weaknesses [2] Group 2: Political Proposals Impacting the Industry - A significant concern for the banks is President Trump's proposal to impose a 10% cap on credit card interest rates for one year, which would require legislative action [3] - The Credit Card Competition Act (CCCA) was reintroduced, mandating that large banks provide merchants with a choice of at least two payment networks, potentially lowering prices by 1% to 2% and saving consumers $150 monthly [4][5] Group 3: Financial Implications - The proposed cap on credit card interest rates could result in a substantial financial impact on banks, reducing interest income from loans and affecting revenue from swipe fees [6] - An analysis indicated that a 10% cap could save consumers $100 billion annually in interest payments, directly affecting banks like JPMorgan Chase, which generated approximately $28 billion from card services in 2025 [7]

Core Viewpoint - JPMorgan Chase is opposing President Trump's proposed 10% cap on credit card interest rates, arguing it would negatively impact consumers and necessitate significant changes to the bank's credit card operations [1][2][4]. Group 1: JPMorgan's Position - JPMorgan's Chief Financial Officer Jeremy Barnum stated that the proposed cap would be "very bad for consumers" and the economy [1]. - Barnum indicated that if the cap were implemented, the bank would have to make substantial changes to its credit card business [2]. - CEO Jamie Dimon supported Barnum's comments, emphasizing that the bank would need to adjust its business model to account for the increased risks and price controls [4]. Group 2: Market Context and Legislative Pressure - As of 2025, JPMorgan held approximately $211 billion in outstanding credit card balances, representing about 18% of the U.S. market [6]. - The bank's U.S. credit card loan book was around $235 billion as of Q3 2025, with expectations of growth following the acquisition of Apple's credit card portfolio [7]. - President Trump is advocating for the Credit Card Competition Act, which aims to allow retailers to route transactions away from Visa and Mastercard, potentially disrupting the current fee structure [10][11][13]. Group 3: Market Reactions - The renewed legislative push has caused market fluctuations, with Visa shares down nearly 4% and Mastercard's stock down over 3.5% [16].