A few weeks after the Federal Reserve approved interchange rules to the Dodd-Frank Act, enough dust has cleared to see that almost everyone is unsatisfied with the compromise.
Smaller retailers are not convinced the change will affect their bottom lines, according to Bloomberg. Big banks are looking for ways to make up for billions in lost revenue and payment networks are forecasting slower growth.
Visa recently filed updated expectations with the Securities and Exchange Commission to determine the impact of the new rules and predicted that revenue growth for the 2012 fiscal year will be down from a projection of 11 percent to 15 percent from the previous fiscal year.
Moody’s Corp. reported earlier this month that banks will make up most, if not all, of the lost revenue over a period of several years “through a variety of revenue enhancement measures,” according to Bloomberg.
Small business owners and franchise owners remain doubtful that the rules will benefit them at all, but bigger retailers such as Wal-Mart and Home Depot could lower prices, invest in technology and provide more payment options for customers as a result from the lower interchange fee.
Jaret Seiberg, a financial services policy analyst with MF Global Holdings Ltd., said that merchant acquirers, firms that serve as third parties in transactions between retailers and their banks, will likely save money with the new rule, according to Bloomberg.
The cap on interchange fees stand to give convenience stores about $830 million to put back into the economy, although the National Association for Convenience Stores has expressed disappointment in the Fed’s limit and said it should have done more.
Debate on which industry comes out on top is still unclear at this point, although most financial experts agree that consumers come out on bottom.
“It’s not going to be the doomsday scenario, but it’s still going to be more expensive for the average consumer,” Seiberg said, according to Bloomberg.