Visa’s New Strategy For Durbin’s

The new implementation of the 2010 Durbin Amendment will cap fees for small businesses accepting debit cards and limit payment card networks from
imposing anti-competitive restrictions. To maintain Visa’s debit dominance, Chairman and Chief Executive Officer Joseph Saunders has two strategies in
mind. To keep debit volume in this new environment, Visa will be making modifications to overall and margin merchant costs. These include fixed processing fees and a reduction in variable fees.  The second strategy is an
implementation of a fixed acquirer fee called the “Network Participation Fee” which will be for the institutions accepting all Visa products and the fee will be based on the size and number of locations of the merchants. The collections from this fee will be used for the investment in their security and payments network. In the end, the combination of these fixed and variable fees will be great incentives to encourage transactions over the Visa network with lower per-unit transaction costs and future value-added services, such as merchant benchmark loyalty rewards programs and mobile messaging to drive merchant sales growth. Saunders states that this is an opportunity for merchants to join the same partnership programs the company has always offered their issuers.

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