Mastercard, Visa Face New Challenges As Fed Explores Debit Card Fee Reductions
Portfolio Pulse from Anusuya Lahiri
The Federal Reserve is planning to introduce a proposal to reduce the fees merchants pay to banks for debit card transactions. This could impact major card issuers like Mastercard (MA) and Visa (V), who have been charging a fee of 21 cents plus 0.05% of the total transaction value for each transaction. The Durbin amendment, which introduced this fee cap, has led to a shift in the payments sector, reducing the influence of networks like Visa and Mastercard in setting interchange fees.
October 18, 2023 | 11:11 am
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NEGATIVE IMPACT
Mastercard could be negatively impacted by the Federal Reserve's proposal to reduce debit card transaction fees.
Mastercard, as a major card issuer, earns significant revenue from the fees charged on debit card transactions. A reduction in these fees could lead to a decrease in revenue.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Visa could be negatively impacted by the Federal Reserve's proposal to reduce debit card transaction fees.
Visa, as a major card issuer, earns significant revenue from the fees charged on debit card transactions. A reduction in these fees could lead to a decrease in revenue.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100