Visa & Mastercard charges

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Hierbij steekt de aanbieding van Visa om hun ATM-charges te beperken tot
0,2% schraal bij af. Dat moet dus nog verder omlaag!

http://online.wsj.com/article/SB10001424052748703465204575207643978621172.html
Visa Europe—owned by European member institutions under license from
Visa Inc.—said it would cut the so-called cross-border multilateral
interchange fee to a maximum of 0.2% on debit-card purchases. The
commission, the EU's executive arm, says that amounts to up to a 60%
reduction.

Groet / Cees


Visa, MasterCard Fall on ‘Surprising’ Senate Vote to Curb Debit
http://www.businessweek.com/news/2010-05-14/visa-mastercard-fall-on-surprising-senate-vote-to-curb-debit.html
May 14, 2010, 10:20 AM EDT

By Peter Eichenbaum

May 14 (Bloomberg) -- Visa Inc. fell as much as 9.4 percent and
MasterCard Inc. slid 7.9 percent after the U.S. Senate voted to include
limits on debit cards in the financial-overhaul bill.

Lawmakers approved a measure empowering the Federal Reserve to curb
debit-card interchange, or “swipe” fees, charged to merchants on each
transaction. Visa, the world’s biggest payment network, dropped $7.61 to
$78.12 at 9:40 a.m. in New York Stock Exchange composite trading, and
has fallen 18 percent since its record closing high of $96.59 on April
23. MasterCard fell $17.52 to $214.79, and has tumbled 19 percent in
three weeks.

Shares of payment networks and banks came under pressure last week as
Senate Majority Whip Richard Durbin pushed curbs on debit interchange
fees. The limits may crimp revenue at Bank of America Corp., Wells Fargo
& Co. and JPMorgan Chase & Co., the biggest U.S. debit-card issuers.

“Passage of Senator Durbin’s interchange amendment was surprising,”
Jason Kupferberg, an analyst with UBS Securities LLC, said today in a
note to clients. He rates shares of both companies “buy.”

Merchants last year paid $19.7 billion in fees tied to debit
transactions processed by Purchase, New York-based MasterCard and San
Francisco-based Visa, with more than half that amount paid to banks as
interchange, according to the National Retail Federation. Visa and
MasterCard collect royalties from banks tied to card spending.

‘Disruptive’ to Commerce
“We expect Visa and MasterCard to be weak on the news,” JPMorgan analyst
Tien-tsin Huang wrote yesterday in a note to clients. “The amendment
would be very difficult to implement and disruptive to card commerce,
but manageable in terms of financial impact for the processing vendors.”

Huang said he continues to rate Visa and MasterCard “overweight.”

Earlier this week, Durbin altered his proposal to exempt lenders with
assets of less than $10 billion, or 99 percent of U.S. banks. That
failed to win the support of trade groups representing smaller community
banks and credit unions who said the amendment would make their debit
cards more expensive compared with those issued by the biggest lenders.

“To make matters worse, nothing would stop Visa and MasterCard from
simply applying the artificially lowered interchange rates across the
board to all issuers, regardless of size, forcing many credit unions and
community banks to re- evaluate their ability to offer debit cards,” the
Independent Community Bankers of America and the Credit Union National
Association said in a May 12 letter to senators.

Retail Rules
The amendment permits retailers to offer discounts for cash, checks or
debit cards, or for a particular card brand, and would let merchants set
minimums and maximums for credit-card purchases.

“It will prevent the giant credit-card companies from using
anti-competitive practices, allow merchants to offer discounts to their
customers and restore common sense and fairness to this broken system,”
Durbin said in a statement.

Visa and MasterCard said the bill would benefit retailers at the expense
of consumers.

“We are disappointed that Senator Durbin has decided to force unrelated
legislation into the financial reform package at the 11th hour without a
hearing or debate,” Visa said in a statement. “We’re hopeful that when
the issue is fully reviewed by members of Congress during the next phase
of negotiations, they will conclude the amendment harms consumers,
credit unions and community banks and should be eliminated from the bill.”

The industry escaped previous attempts to regulate interchange on credit
cards, which average about 2 percent per transaction, saying the fees
are needed to compensate them for the risk of lending money. That
argument isn’t relevant to interchange on debit cards, which tap funds
held in consumer checking accounts.

‘Reasonable Approach’
“It seems to me the scaled-down version that Dick Durbin came up with is
a reasonable approach,” Senator Susan Collins, a Maine Republican, told
reporters after voting for the amendment.

Debit transactions should pass at face value, just like checks,
according to the National Retail Federation.

“Debit cards formerly passed at face value, but now the biggest banks
and card companies are using them to circumvent the system and are
reducing the face value of debit-card transactions through higher fees,”
NRF chief lobbyist Steve Pfister said in a statement. “This hurts
retailers and merchants of all sizes, including doctors’ offices,
restaurants and florists, and it causes all of our customers to pay more.”

Durbin’s proposal, if approved by the House and signed into law by
President Barack Obama, would enrich “big-box” merchants, hurt consumers
and stifle competition, according to MasterCard.

“The Durbin amendment would give lobbyists for big retailers what they
have been unable to achieve through other efforts -- the ability to
maintain all the benefits they receive from debit-card acceptance while
transferring the cost to consumers,” MasterCard said in a statement.

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