Debit Card Antitrust Concerns

Visa Inc. and MasterCard Inc. are the world’s biggest payment networks in the world. Today, the two entities may raise antitrust concerns if they “collude” with larger banks to block limits on debit- card interchange fees and scared off small banks into joining the opposition, according to a U.S. Senator.

Senator Richard Durbin stated, “If your companies were to coordinate such punitive actions in the same way that you appear to have coordinated your messaging tactics, serious concerns would be raised that you are engaging in an unlawful restraint of trade,” in a letter to the chief executive officers of San Francisco-based Visa and Purchase, New York-based MasterCard.

Senator Durbin is pushing legislation that empowers the Federal Reserve to impose limits on debit card interchange or “swipe” fees that merchants pay to accept the cards.

Curbing the fees, which average about 1 percent per transaction, could crimp revenue at Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co., the biggest U.S. debit-card issuers.

The Senate voted 64 to 33 to approve the measure as part of the financial overhaul bill. The proposal becomes law if it survives a bipartisan panel assigned to merge the House and Senate versions of the legislation, and President Barack Obama signs it. Representative Carolyn Maloney, a New York Democrat nominated to participate in the talks, said she expects changes in Durbin’s proposal, without elaborating.

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