Visa prepared to face Durbin Amendment changes

Visa Inc. executives, in the face of new government regulations that will likely limit the company's PIN-debit transaction volume, appear confident that they can persevere.

“I still believe that we’re in a better position to compete in this environment than anyone else,” Visa chairman and CEO Joseph Saunders said Wednesday afternoon during a conference call with analysts, according to

A new law that regulates debit interchange fees also bans exclusive network affiliations on debit cards and bans issuers and networks from interfering with merchants’ routing preferences.

Many debit cards only offer the Visa brand for signature debit and the Visa-owned Interlink point-of-sale mark for PIN-debit. The exclusive network affiliation provision in the new law requires most debit cards to offer at least two unaffiliated networks by next April.

Visa holds approximately 75 percent of the U.S. signature debit market and Interlink holds an estimated half of the PIN-debit market.

“A portion of transactions may be routed away from Interlink to alternative PIN networks," Saunders said, according to "But make no mistake: We will compete vigorously to maintain the Visa routing preference and have several strategies we will put into action to achieve this outcome."

Both Visa and MasterCard provide incentives to financial institutions and to merchants to issue and accept cards with their brands. Visa may potentially use up to 16.5 percent of gross revenues to provide incentives to specific merchants to ensure Visa receives routing preference, according to

Saunders dismissed a speculation that PIN-debit volume could suffer since the new regulations don’t distinguish between PIN and signature debit He said that some debit cards don’t have a PIN option. Saunders also dismissed the idea that banks would push consumers to use credit cards.

In January, Visa said it would develop a two-tier interchange schedule once the Federal Reserve released its final rate, one with regulating rates arising from the Dodd-Frank financial reform law and the other with unregulated rates applicable to banks and credit unions with fewer than $10 billion in assets.

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