Card issuers: the proposed Visa–Mastercard interchange settlement could hit your portfolio harder than you think. Are you ready for what’s coming?

Under the proposed settlement, standard consumer credit card interchange would be capped at approximately 1.25%. Today, those products typically earn 1.6–1.8% on card-present retail volume.

That implies a 45–55 basis point margin squeeze across a large portion of most issuer portfolios.

Premium credit cards, by contrast, are not subject to the proposed interchange cap. Their direct interchange impact is limited, creating a short window for issuers to evaluate card upgrade strategies that help preserve yield.

However, a new complication is emerging. With honor-all-cards rules potentially relaxing, some merchants may choose to decline or surcharge premium cards. Upgrades can still deliver economic lift, but issuers now need to balance interchange preservation against merchant acceptance risk.

Network product strategy is not the only lever available.

Visa and Mastercard network fee optimization can deliver immediate, material P&L improvement and help offset part of the anticipated interchange compression.

The reality is that issuers have a limited runway before these proposed changes take effect.

Now is the time to audit your card portfolio, model the revenue impact, and build an action plan to protect profitability under the new interchange framework.

What do you see as the biggest challenge for issuers:

• The interchange cap itself

• Premium card acceptance risk

• Or cost and network fee restructuring?

If you want help evaluating your portfolio or prioritizing the highest-ROI actions, let’s connect.