Asked by an analyst at Visa’s quarterly earnings call about whether delaying the Durbin Amendment’s provisions is possible, Visa chief executive Joseph W. Saunders noted that banking interests are lobbying Congress to reconsider the measure’s “unintended consequences.” Many banks have said they will raise demand-deposit account fees, cut debit card rewards programs, or take other steps to replace their lost debit revenues. “In our opinion, consumers have been thrown under the bus in this legislation,” Saunders said.
The Fed is proposing 12-cent interchange caps that would affect large debit card issuers, caps that could cut their debit revenues by 70% or more. The interchange provisions won’t affect Visa directly, though they could reduce debit card usage, which would mean fewer revenue-producing transactions flowing over Visa’s networks. And Dodd-Frank’s provisions that will give merchants more transaction-routing choices will break up the exclusive arrangements Visa has with many issuers in which their debit cards offer the Visa brand for signature debit and only the Visa-owned Interlink network for point-of-sale PIN debit.
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