Small Issuer Exemption Gets No Confidence Vote

by Mercator Advisory Group 0

The 2011 PULSE Debit Issuer Study underscores the lack of confidence small issuers have in the ability of Congress to protect them from the negative effects of interchange fee regulation. Anticipating a 73 percent decline in revenues should have a chilling effect on near term investments and will almost certainly result in higher overall prices for retail DDA services.

One exempt issuer in the 2011 Debit Issuer Study responded, “We see no impact in 2011, but over time (in 2012-2013), we expect interchange income will decrease due to marketplace pressures lowering the interchange rate.” Another exempt issuer commented that, “Even if a network were to offer a two-tier pricing schedule, the shift in market conditions would eventually require the interchange rate for exempt institutions to be reduced.”

Many of the issuers responding to this survey also indicated they plan on promoting PIN debit should interchange fees for PIN and signature collapse; citing increased efficiencies and reduced fraud.

Read full article here: http://uk.finance.yahoo.com/news/Despite-Exemption-Small-businesswireuk-971855453.html?x=0