Analysts aren’t sure legislation targeting Visa and Mastercard would pass — but see the potential for more annual fees for credit cards if it does.
Credit-card companies look to be under a political microscope once again as the Wall Street Journal reported Wednesday that senators are working on a new bill that would target Visa Inc. and Mastercard Inc.
Merchants have a contentious relationship with the card industry, chafing at increases to the fees that they’re required to pay members of the financial system when consumers make card purchases. Visa and Mastercard set interchange fees, which merchants pay to card-issuing banks. Merchants also are charged network fees that go to Visa and Mastercard.
Financial-industry players, however, see fees as necessary to account for the risk they take on in facilitating transactions and the infrastructure they provide that moves money along. “We are skeptical that a bill taking direct aim at Visa and Mastercard could become law without a protracted, bitter battle,” wrote Ian Katz, managing director of Capital Alpha Partners, a policy-research organization. “It’s hard to think it could get through Congress this year. “
Barclays analyst Ramsey El-Assal highlighted that the senators seem to be pushing for measures around card routing rather than interchange caps, a strategy that “could see broader bipartisan appeal.”
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