By IB Times Staff Reporter | July 28, 2011 9:58 AM EDTVisa Inc. (NYSE: V) will implement a new fixed acquirer fee called the "Network Participation Fee" that will apply to both credit and debit cards, in order to help the company win routing business and maintain debit volumes. Visa will also lower variable processing fees and the actions are designed to lower merchant fees and essentially let the retailer capture more of the scale benefit. Visa is the first company to reveal its Durbin migration strategies.
RBC Capital Markets said in a note to clients.
RBC Capital Markets said in a note to clients.
"We believe more pricing competition between Visa, MasterCard, and other PIN networks will accelerate. Given Visa’s overall unit cost advantage relative to the competition; however, we believe they will be able to retain a significant portion of its debit volume," said Daniel Perlin, an analyst at RBC Capital Markets. Perlin believes Visa is also porting the fixed cost leverage, typically fully enjoyed by Visa, to the merchants, which should help drive routing.
read more analysts views on Visa's fixed acquirer fee
