How the Credit Card Competition Act Could Affect Gas Stations

The U.S. payments industry is on the verge of a major shift with the proposed Credit Card Competition Act (CCCA). If passed, this legislation could drastically alter how credit card transactions are processed—especially for businesses with thin profit margins, like gas stations.

For years, gas stations have struggled with high interchange fees, which eat into their already razor-thin profits. The CCCA aims to introduce more competition among payment networks, potentially lowering these fees. But how exactly would this affect gas stations? Let’s break it down.

Why Gas Stations Are Especially Vulnerable to High Credit Card Fees

Gas stations operate on some of the slimmest profit margins in retail—often just 1-3% per gallon. Unlike other businesses, they can’t easily pass credit card fees onto consumers due to fierce competition and price-sensitive customers.

The Hidden Cost of Swipe Fees

Every time a customer pays with a credit card, gas stations pay:
- Interchange fees (set by card networks like Visa and Mastercard)
- Processing fees (charged by payment processors)

For a $50 fuel purchase, these fees can add up to $1 or more, significantly cutting into profits.

The Role of Payment Networks

Currently, Visa and Mastercard dominate the market, leaving little room for competition. The CCCA would require large banks to offer at least two unaffiliated payment networks for processing transactions, potentially driving down costs.

How the Credit Card Competition Act Could Change the Game

The CCCA isn’t just about lowering fees—it’s about breaking the duopoly of Visa and Mastercard. Here’s how it could impact gas stations:

1. Lower Interchange Fees

By introducing competition, the CCCA could force networks to reduce interchange rates. This would directly benefit gas stations, allowing them to retain more revenue per transaction.

2. More Payment Network Options

Gas stations might gain access to alternative networks like:
- Discover or American Express (if they lower their fees)
- New fintech-driven networks (such as blockchain-based solutions)

This could lead to better pricing models tailored for high-volume, low-margin businesses.

3. Potential for Dynamic Routing

With multiple networks available, gas stations could use least-cost routing—automatically selecting the cheapest processing option for each transaction.

Challenges Gas Stations Might Face

While the CCCA offers potential savings, it’s not without complications.

Upgrading Payment Infrastructure

Many gas stations still rely on older point-of-sale (POS) systems. Supporting multiple payment networks might require costly upgrades.

Consumer Confusion

If new payment networks emerge, customers might hesitate to use unfamiliar options, slowing adoption.

Possible Pushback from Banks & Card Networks

Visa and Mastercard have lobbied aggressively against the CCCA. If they succeed in watering down the bill, gas stations may see little benefit.

The Bigger Picture: How This Ties Into Broader Economic Trends

The CCCA debate isn’t happening in a vacuum—it’s part of a larger push for financial fairness and anti-monopoly reforms.

Rising Inflation & Fuel Prices

With gas prices fluctuating, every penny saved on fees helps gas stations stay competitive.

The Growth of Digital Payments

As cash usage declines, reliance on credit cards grows—making fee structures even more critical.

The Fight Against "Junk Fees"

The Biden administration has targeted hidden fees across industries, and credit card processing is next in line.

What Gas Station Owners Can Do Now

While the CCCA’s fate remains uncertain, gas station operators should:
- Stay informed on legislative updates
- Evaluate their current payment processing contracts
- Prepare for potential system upgrades if the law passes

The bottom line? The CCCA could be a game-changer for gas stations—but only if it delivers on its promise of true payment network competition.