The chairman of Discover Financial Services says his company is increasing the capacity of its Pulse electronic funds transfer network in anticipation of a business boost after the Federal Reserve’s new debit interchange rules are released later this week, according to Digital Transactions.
“Our Pulse network is highly scalable; we have taken actions to build capacity in advance of potential demand … and if we need to add even more capacity, we will add even more,” Discover chairman and chief executive David W. Nelms said Thursday during an earnings conference call with analysts.
The debit swipe fee regulations will go into effect July 21 and will likely prohibit network exclusivity on cards.
“An example would be a card offering only the Visa network for signature debit and the Visa-owned Interlink network for point-of-sale PIN-debit purchases,” reports Digital Transactions. “Industry observers believe the outlawing of such arrangements, very common with banks and networks, will divert business from Visa Inc., the debit leader, and benefit rivals such as MasterCard Inc., Pulse, Star, NYCE, Accel-Exchange, and others.”
Even though Discover mainly focuses on credit cards, the company could profit since it does have a signature debit product At the same time, Nelms is not jumping to any conclusions until the Fed issues its final debit ruling later this week.
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“I think there’s a lot we don’t know right now,” he said.
Click here to read more of Nelms’ comments.
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