US Banks Anticipate Modest Hit from Visa and Mastercard Agreement on Swipe Fees

Wednesday, 27 March 2024, 12:32

The $30 billion settlement between Visa, Mastercard, and merchants to reduce credit and debit card fees is projected to modestly affect the earnings of U.S. banks. The interchange fees typically ranging from 1.5% to 3.5% per transaction could result in a 1%-2% EPS impact, though the actual impact may vary based on transaction details, as estimated by J.P.Morgan.
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US Banks Anticipate Modest Hit from Visa and Mastercard Agreement on Swipe Fees

US Banks and the Visa-Mastercard Swipe Fee Deal

U.S. banks are bracing for a modest impact on their earnings following the $30 billion settlement aimed at limiting credit and debit card fees for merchants, orchestrated by payment giants Visa and Mastercard. The settlement is expected to affect the interchange fees paid by merchants, which normally comprise small fixed fees in addition to a percentage of total sale amounts averaging between 1.5% to 3.5% per transaction, according to Bankrate.com.

J.P.Morgan noted that based on a preliminary assessment, the impact on earnings per share (EPS) could be in the range of 1%-2%, before considering any mitigation strategies using retail card volumes.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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