June 29, 2011
Visa and MasterCard jumped 10 percent upon news the Federal Reserve had raised its initial ruling for debit interchange fee caps, according to Bloomberg.
Visa rose to $86.57 at 4 p.m. EST in New York Stock Exchange composite trading, the most since March 2008. MasterCard increased 11 percent to $309.70, its largest gain since February 2009.
“The Fed voted today to cap debit-card swipe fees, also called interchange, at 21 cents a transaction, lifting the limit from an earlier proposal of 12 cents,” reports Bloomberg. “The caps are mandated by the Dodd-Frank Act… The cap, which will reduce the fees merchants pay to accept debit cards, replaces a formula that averages 1.14 percent of the purchase price.”
Visa has gained 23 percent this year after dropping 20 percent in 2010, while MasterCard has climbed 38 percent after last year’s 12 percent decrease, according to Bloomberg.
Click here to read more highlights of the Fed’s updated debit swipe fee reform proposal.
ABA Statement on Fed Interchange Rule
NRF Expresses Disappointment in Federal Reserve for Watering Down Swipe Fee Reform
Merchants Payments Coalition: Federal Reserve Bends to Bank Pressure
Bloomberg: “How Wal-Mart Trumped JPMorgan on Debit Cards”
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