A bill approved by the U.S. Senate on May 13th will allow merchants to set minimum and maximum transaction amounts for debit card purchases. Previously, you could buy anything with a debit card, regardless of the amount, and for store owners – if the purchase was small, like a pack of gum, it meant paying more in debit card service fees than the profits made on the purchase. With this bill, merchants will be able to set limits to ensure their profitability on debit card purchases.
MasterCard and Visa have been concerned over credit and debit card regulation for a long time. They are credit and debit card processing networks, and don’t receive all of the interchange fees directly, but their revenues do depend on how much people spend on their cards. If merchants restrict purchases, they fear they will experience large drops in revenues as people will be less likely to use their cards.
MasterCard is determined to fight this bill until it is finalized into law. While the bill isn’t restricting the amount Visa or MasterCard can charge in interchange fees to merchants on credit card purchases, they’re concerned that the regulation on debit transactions will open the door to more regulation in the future.
Reuters reports:
“MasterCard U.S President 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.”
