Visa and Mastercard Reach Deal to Lower Swipe Fees, A Win for Merchants and Potential Boost for Consumer Choices: Analyst
Portfolio Pulse from Anusuya Lahiri
Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA) have reached a settlement with U.S. merchants to lower credit card interchange fees by 4bps and cap swipe fees until 2030. This deal also removes anti-steering provisions, potentially benefiting merchant acquirers like Block, Inc (NYSE:SQ), Fiserv, Inc (NYSE:FI)/Clover, Toast, Inc (NYSE:TOST), and Global Payments Inc (NYSE:GPN). Analyst Dan Dolev views this as a relief from regulatory pressure for Visa and Mastercard, and beneficial for merchant acquirers due to the surcharge on specific credit cards.
March 27, 2024 | 6:49 pm
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POSITIVE IMPACT
Fiserv, Inc/Clover could see increased transaction volumes due to the settlement, benefiting from the surcharge on specific credit cards.
With the settlement allowing for surcharges on specific cards, Fiserv, Inc/Clover could experience increased transaction volumes, positively impacting its revenue.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Global Payments Inc could see a positive impact from the settlement, benefiting from increased transaction volumes due to surcharges.
Given its exposure to transaction-based pricing, Global Payments Inc could benefit from increased transaction volumes stemming from the settlement's allowance for surcharges on specific cards.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Block, Inc could benefit from the settlement as merchants may surcharge on specific credit cards, increasing transaction volume.
The settlement allows merchants to surcharge on specific cards, which could increase transaction volumes for Block, Inc, benefiting from its take rate on volume.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Toast, Inc could benefit from the settlement as it may lead to increased transaction volumes from surcharges on specific credit cards.
The deal's provision for surcharges on specific cards could lead to increased transaction volumes for Toast, Inc, positively affecting its financial performance.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Mastercard's agreement to lower fees could reduce regulatory scrutiny but may impact future revenue growth.
Similar to Visa, Mastercard's decision to lower interchange fees and cap them could dampen its ability to grow revenue through fee increases, despite potentially reducing regulatory pressures.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Visa's settlement to lower interchange fees may relieve regulatory pressure but could limit medium-term pricing power.
The agreement to lower fees and cap them until 2030 might reduce Visa's ability to increase prices in the medium term, potentially impacting revenue. However, the relief from regulatory pressure could offset some negative impacts.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90