Visa, in an attempt to delay the Federal Reserve's new debit card interchange regulations, reportedly offered to cut debit interchange by 35 percent for small merchants.
According to DigitalTransactions.net, on June 8, Joseph W. Saunders, the chairman and chief executive of Visa, Inc., sent Sen. Joe Manchin (D-W. Va.) a letter promising to cut the amount it would charge small businesses for each debit card transaction by 35 percent.
“We feel strongly that it is important to give the regulatory bodies additional time to assess the impact of the legislation,” Saunders' letter said, according to DigitalTransactions.net. “This more thoughtful approach will result in a better solution for U.S. businesses and consumers. Therefore, we are willing to make a reduction of debit interchange to help small businesses, i.e., those with $10 million or less in total sales, upon passage of the Tester-Corker Debit Interchange Fee Reform Act. During the study period and until the new implementation date, Visa will lower by 35 percent the debit interchange rates applicable to transactions at small merchants, which make up more than 90 percent of all U.S. businesses. This will enable the rate adjustments intended by Congress to immediately benefit small businesses and not await the outcome of the study and regulation.”
That same day, the Senate voted on an amendment that would have delayed implementation of a provision passed in Congress during last year's major financial regulation overhaul.
That provision requires the Federal Reserve Board of Governors to set “reasonable and proportional” debit card interchange controls, according to DigitalTransactions.net. The draft proposal caps fees at 12 cents per transaction, which is 70 percent less than what banks and card issuers currently charge.
Card issuers stand to lose billions of dollars annually and lobbied hard for an amendment offered earlier this year by Sens. Jon Tester (D-Mont.) and Bob Corker (R-Tenn.) to delay implementation of the rule.
It is unknown if the letter sent to Manchin was sent to other senators as well. Manchin voted in favor of the delay, although the amendment did not get enough votes for final passage.