As the number one debit network in the United States, Visa has a lot of relationships to protect notwithstanding their investment community. But, the analyst industry has reacted favorably to their new merchant pricing strategy. Migrating to more of a fixed fee model will certainly be attractive to large merchants, but may leave smaller merchants feeling a bit left out.
“The new structure is designed to help Visa attract debit routing volume and fend off competition coming its way thanks to the Durbin Amendment to Dodd-Frank, which insists that issuers enable two unaffiliated networks for electronic debit transactions.”
At the same time, Visa announced a new “network participation fee” that will be charged to acquirers based on a formula that combines merchant size and number of outlets. And we have yet to hear how large/small issuers are going to be handled – should make for some interesting spreadsheets.
