Visa’s debit spending fell by 12 percent in April and eight percent in May, though credit spending increased by eight percent in April and 10 percent in May, according to 4-Traders.
Banks have been promoting credit cards as an alternative to debit cards for everyday spending in response to interchange fee caps established by the Durbin Amendment, a provision of the 2010 Dodd-Frank Act.
Additionally, Visa has been impacted by a provision that requires banks to offer merchants a choice between two payment networks to process debit transactions, ATM Marketplace reports.
Before the provision took effect in April, over half of Visa’s U.S. debit cards were subject to exclusive agreements.
“There was no way to respond to the new legislation without surrendering market share,” Visa CFO Byron Pollitt said at an investor’s conference last week, according to 4-Traders.
Visa established a new fee structure in response to the rule in order to draw merchants to choose the company as a payment network. The new fee structure includes a fixed fee to lock in to the Visa payment network, merchant incentives and variable transaction fees.
The new plan was designed to lower costs for merchants, though it is currently under an investigation by the Department of Justice for possible anti-competition law violations, ATM Marketplace reports.