Interchange Fees Forum

Lauren Tara LaCapra

NEW YORK (TheStreet) — It may be surprising to learn that while big banks brace for the impact of a rule limiting fees on debit-card purchases, the companies that process those transactions aren’t worried much at all.

The so-called Durbin amendment is targeting the fees banks charge merchants for accepting those payments. The change stands to clothesline profits at large consumer banks by $4.5 billion to $5 billion a year, according to an S&P report. Bank of America(BAC) alone has outlined a $22 billion goodwill writedown and $5 billion in lost revenue per year, while another smaller lender, TCF Financial(TCB) is suing the federal government to prevent the law from being implemented.

MyBankTracker.com

The government mandates meant to protect consumers from the giants of the banking industry might end up costing everyday banking customers.

Chase expects to begin phasing out its debit card rewards programs next February, according to Charlie Scharf, JPMorgan Chase’s chief executive of retail financial services, who spoke at the BancAnalysts Association of Boston Conference earlier this month.

The consensus at the conference was that the Federal Reserve would issue new debit card interchange fee rules sometime in the next few weeks, according to US Banker. The new rules would come as part of the Durbin Amendment to the financial reform act passed earlier this year.

Forbes

Posted by Bob Egan

The answer to Capital One’s question: “What’s in your wallet?” may be “nothing” in the next few years.

Three major U.S. mobile operators have created a joint venture known as ISIS, which intends to build a mobile payment solution that will allow consumers to make purchases at retail stores with just a wave of a mobile phone at the checkout counter. The founding members of the JV include AT&T, T-Mobile and Verizon Wireless.

Digital Transactions

By Aparajita Saha-Bubna
   Of DOW JONES NEWSWIRES

A new federal law curbing fees on debit-card transactions could wipe out $9 billion in revenue annually for issuers.

The estimate comes from CardHub.com, a credit-card comparison website that has access to broad industry data. Banks are scrambling to claw back some of the lost revenue from this and prior regulatory changes. Among the new tactics being considered: emphasizing prepaid cards, which are exempt from the new rules.

Banks are also responding by adding new fees to existing products, such as checking accounts, and watering down debit rewards programs.