Major debit issuers in the United States are once again beginning to talk about plans to mitigate the impact of the Durbin Amendment on their franchises. Wells Fargo however, is the first such issuer to mention changes to their merchant fee model.
“Wells, of San Francisco, has several options for recouping the $325 million in quarterly revenue it estimates it would lose under the Dodd-Frank Act cap, including: raising minimum account balances, introducing a debit card carrying fee and implementing surcharges on checking accounts, he said.
It also could “unbundle” the services “you provide to merchants,” Stumpf said. What that means is that Wells could conceivably find ways to charge merchants for debit-processing-related services that would not fall under the cap. For example, experts say, a bank could charge stores a fee to guarantee that a transaction will clear, something they now do for free.”
Rumors of potential changes to merchant’s guaranteed payment model have been floating around for some time, but this seems to be first time it’s been stated as a potential strategy by a major issuer. We can’t figure out exactly how that would work and can’t conceive of any significant merchant accepting such a fee, so this statement could just represent one way of taking the spotlight off consumer impact, if only in our imaginations.