May 13, 2011
Apparently, payment cards aren’t Durbin’s only victim. The amendment that mandates the Federal Reserve to impose debit interchange regulations will also impact mobile carrier’s chances to effectively compete against Visa, MasterCard and other major issuer networks, according to John Stankey, AT&T‘s head of business solutions.
“Some changes in the banking laws occurred with the amendments that were put in with the Dodd-Frank bill … As transaction fees were limited and things were changed, it kind of changed the business model,” said Stankey, according to Reuters.
AT&T, along with Verizon Wireless and T-Mobile USA, launched the ISIS mCommerce network last November. Last week, ISIS announced it was changing its game plan. Instead of forming an independent mobile payment network by partnering with Discover, ISIS now wants to work with Visa and MasterCard as well. Stankey said ISIS had always planned to collaborate with “all parties” eventually. (Read more)
“Frankly, it just happened a little bit sooner than probably what we would have guessed,” he said.
Reuters reports ISIS wrote to regulators in a February, stating the suggested debit interchange caps would “hamper the development of new payment and commerce systems, and limit the number of new entrants into a payments market already dominated by a few major networks.”
Click here to read more of Stankey’s thoughts on Durbin’s potential impact on mobile payments.