Big Banks Eye Payments Deal That Could Rewire Debit Fees

Some of the biggest U.S. banks are exploring a deal that could reshape the economics of debit cards, reopen one of payments’ fiercest policy fights and give large issuers a way around federal fee limits they have opposed for more than a decade.

The Wall Street Journal reported Monday (July 6) that JPMorgan Chase, Bank of America, Wells Fargo and PNC Financial Services Group have held preliminary discussions in recent months about acquiring a debit card network owned by Fiserv.

The talks are early, tentative and may not result in a transaction, the Journal reported, citing people familiar with the matter. Several banks that examined the idea have already decided they are unlikely to move forward, according to the report.

The strategic logic is clear. Capital One’s $50.6 billion purchase of Discover gave it ownership of a card network, allowing it to operate closer to the transaction flow and reduce reliance on outside networks. That deal appears to have sharpened interest among other banks in whether network ownership could change the economics of debit.

As the Journal put it, “Some of the largest banks in the country have been exploring an acquisition that could allow them to get around one of the laws they hate most: the limits on fees they earn on debit-card transactions.”

At issue is the Durbin Amendment, part of the 2010 Dodd-Frank law. The rule limits the debit card interchange fees that banks with $10 billion or more in assets can collect from merchants when transactions are routed over an outside network. But the Journal reported that banks could be exempt from those caps if they also own the network that underpins the transaction.

That possibility makes Fiserv’s debit networks strategically important. Fiserv owns STAR and Accel, both of which process debit card transactions. The company’s shares have fallen sharply, the Journal noted, creating a potential opening for buyers.

The risk is political as much as financial. The Journal reported that some bank executives worry a deal could provoke backlash from lawmakers, regulators and merchants. Merchants have long argued that lower interchange fees help keep consumer prices down. Banks counter that fee caps reduced revenue that once supported free checking, debit rewards and other consumer services.

The Journal framed the preliminary talks as evidence that banks are looking for new leverage in payments. The report noted that the discussions, even at an early stage, are “one more sign of how eager banks are to find an edge in payments wherever they can,” as the industry faces rapid change tied to crypto and FinTechs under the Trump administration.