Selected Excerpt from today's Wall Street Journal
A second clause of the Fed's ruling threatens to cut into Visa's revenue in another, bigger way. The Fed's decision to require two PIN—or personal identification number—networks on each debit card, one of which must be unaffiliated with the processor, will hit Visa even more than the fee cap. More than two-thirds of Visa's debit cards currently have only one PIN network: its own. Under the new rule, these cards must now take on a second, unaffiliated PIN network. When a shopper pays with a debit card that uses a PIN number, merchants may choose which PIN network will handle the order at the time of the card swipe. Considering that about one-third of all U.S. debit volume stems from PIN transactions, Visa stands to lose as much as 4% of its revenue under the new regulation, some analysts estimate. read more
