ORLANDO (Reuters) - Credit card networks MasterCard Inc (MA.N) and Visa Inc (V.N) lost “a big battle” for future revenues when the U.S. Senate voted on Thursday to restrict debit card fees, according to MasterCard President for U.S. Markets Chris McWilton.
“Now we’ve got to make sure we win the war,” McWilton said in an interview on Sunday. “We lost this battle. It’s a big battle. But the war wages on and we’ll be working really hard over the next week or so to stop this.”
The Senate approved an amendment to the financial regulation bill on Thursday that would curb debit card fees and allow merchants to set limits on credit and debit card transaction amounts.
The prospect of card fee regulation has been a long-standing concern for MasterCard and Visa. As credit and debit card processing networks, they do not receive most of the so-called interchange fees directly, but their revenues depend on how much consumers spend on their cards. By allowing restrictions on when consumers can pay with plastic, the amendment would likely crimp those revenues.
MasterCard said it was too soon to quantify the impact of the legislation on its business. But “to the extent that the ecosystem would be upset, the chance is that our revenues could be impacted,” McWilton said.
Shares of MasterCard and Visa slumped on Friday, with MasterCard closing down 8.6 percent at $212.45 and Visa dropping 9.9 percent to $77.26.
The amendment would not directly limit credit card interchange fees, just those on debit cards, but many in the industry fear that it could open the door to wider restrictions on credit card fees.
McWilton said in a speech earlier on Sunday that MasterCard was “very concerned” about the amendment and “working very hard to make sure” that it would not be attached to the final financial regulation bill. He made the remarks at the annual Card Forum and Expo in Orlando, Florida, a credit card industry conference hosted by the trade publication American Banker.
Reporting by Maria Aspan; Editing by Jon Loades-Carter