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Table of Contents

Lead Story

Growth by acquisition


Industry Update

Visa says Durbin impact 'manageable'

TCF appeal denied

$100 million for Square means change for low-end payments

Cyber security update


An interview with Paul Martaus

Ken Musante
Eureka Payments LLC

Research Rundown

Meet The Expert: Adam Atlas

The accidental advertisement

Selling Prepaid

Prepaid in brief

Law center faults UC card programs

A primer on prepaid's basics


The unbanked: Banks are ceding billions in potential revenues

Patti Murphy
ProScribes Inc.

Mobile payments follow many new paths

Brandes Elitch
CrossCheck Inc.


Street SmartsSM:
Networking groups and referral marketing - Part II

Bill Pirtle
MPCT Publishing Co.

The adaptability of POS terminals

Dale S. Laszig
Castles Technology Co. Ltd.

HIPAA compliance fundamentals for ISOs

Mark Brady and Ross Federgreen
CSRSI, The Payment Advisors

Michaels breach reveals gray areas

Nicholas Cucci
Network Merchants Inc.

Company Profile

Creative Vision Studio LLC

Network Merchants Inc.

New Products

A processor-agnostic payment gateway

PayCommerce gateway platform
PayCommerce Inc.


Breaking up is hard to do


10 Years ago in
The Green Sheet


Resource Guide


A Bigger Thing

The Green Sheet Online Edition

July 25, 2011  •  Issue 11:07:02

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Visa says Durbin impact 'manageable'

Visa is ready to compete in the new debit environment," Visa Inc. Chairman and Chief Executive Officer Joe Saunders said in a recent investor conference. He also said Visa is confident projected revenues for 2011 will remain status quo after the Federal Reserve implements its final rule capping debit card interchange fees.

The Durbin Amendment to the Wall Street Reform and Consumer Protection Act of 2010 requires the Federal Reserve Bank to set interchange rates on debit cards. The corresponding final Federal Reserve rule, introduced in June 2011, capped debit interchange fees at 21 cents, plus small allowances for fraud cost and prevention. The cap amounts to approximately half the current average debit interchange fee of 44 cents.

"We remain confident Visa will continue to thrive as an innovative, globally oriented growth company," Saunders told investors in the phone conference. "We are still reviewing details of the 400-page [Federal Reserve debit interchange rule] document. On balance the rules are an improvement from the 12 cent flat fee [initially] issued [for comment and discussion by the Federal Reserve Bank] in December."

Saunders said Visa is "encouraged" by the new, final rule because it allows issuers to recover "at least some" of their costs. He was also cautiously in favor of the Federal Reserve's choice to require two unaffiliated networks be affiliated with the card for processing. Saunders called this the better of the two options, but he emphasized there may be negative unintended consequences for certain parts of the industry such as small banks, credit unions, prepaid and government programs, industry investments, security innovation and reliability.

He said Visa will be affected by the new rule, but the company continues to believe "the impact is manageable based on the environment as we see it. These rules will affect Visa but far from eliminating a portion of U.S. revenues, which in total account for approximately 20 percent of global net revenues."

Onward for Visa

The Visa CEO also said he was glad to have the final ruling because "the final rules provide the clarity needed to begin implementing our plans" in the new debit transaction environment. He promised Visa will have more to say about its debit transaction strategies during investor conferences later this July and in October. At that time, "the majority of our strategies will either be announced or be well on their way," he added.

Saunders indicated the company intends to fight to keep its position as the routing preference for Visa customers. "Providing some level of incentives to specific merchants may be an effective strategy to ensure Visa continues to receive routing profits," he said. "The assumption is some portion of transactions may be routed away from Interlink to alternative PIN networks."

He summarized the company's fiscal outlook stating, "We expect fiscal 2012 will bear the weight of the regulation's financial impact, and in fiscal 2013 revenue growth will gain momentum off of 2012's level. We will compete vigorously for a Visa routing preference."

For additional news stories, please visit and click on "Read the Entire Story" in the center column below the latest news story excerpt. This will take you to the full text of that story, followed by all other news stories posted online.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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