Dual Interchange – Visa Blinks

by Patricia Hewitt 0

On a webinar held today, Visa announcedthat they will support a dual interchange strategy in support ofthe exemption from interchange fee regulations for issuers havingless than $10bn in assets. Speaking for the company, Bill Sheedy,group executive for the Americas for Visa “…told executives thatthe debit interchange schedule for card issuers that are exemptfrom the proposed debit interchange cap would be ‘substantiallysimilar’ to existing debit interchange, the sources reported.” ,according to a report in CU Times (http://bit.ly/dMVTuG).

At the same time, Visa also warned participants that downwardpressure on debit interchange fees will continue a clear signalthat it will not be business as usual for smaller issuers. Thisannouncement will most likely spark something similar from MC andperhaps even other EFT networks, even though their interchange feeschedules are generally more readily adaptable to issuer-based feestructures. The question is – will this release some of thepressure the industry is under at the moment? Perhaps a little,even if skeptics point out the self-preservation aspect of theplan.

The Fed’s position on this aspect of the Durbin Amendment cameacross loud and clear – it’s up to the networks to figure it out.Checked off the list? Well, the devil’s in the details, but dualinterchange is going to become a reality – for now – somehow.

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