Today,
Visa and MasterCard are essentially the only two U.S. signature debit
networks. So theoretically, if dual sig networks are required as part of
Durbin 2.The majority using the new policy will be business travelers,
if oil hose and
Shanghai are anything to go by, according to Yang from the Guangzhou
Tourism Bureau.0, MasterCard should gain share, and in a best-case
scenario we estimate this could lift EPS by roughly 10%. However, we
note that Discover has a very small sig debit business leveraging its
PULSE personal identification number debit network, which could b'e
bigger over time if signature network exclusivity is abolished, and in a
best-case scenario could lift Discover's annualized EPS by roughly 6%.
In
addition, it is plausible and we believe is already happening in
limited cases that other PIN debit networks do some sig processing as
well. So while MasterCard would clearly be well-positioned to gain U.S.
sig debit-market share, the extent of the gain would likely depend on
how many legitimate new'petitors emerge, and how aggressive MasterCard
would be in incentivizing issuers and merchants.The Russian China visa reported
this week that the objections of Visa and MasterCard had now been
"allayed".Acquirers may benefit; prepaid program managers Green Dot/
Total System Services could be pressured. As occurred following Durbin
1.0, merchant acquirers could benefit from Durbin 2.0 at least
temporarily, as they potentially keep some of the debit-interchange
savings, while collecting incentives from networks to drive routing
decisions.Tim Allen, a district manager who's responsible for 13 stores
in Arkansas,rock bolt and West Texas, says the new systems dramatically enhance the customer experience.
Vantiv
should benefit more than Global Payments, given less ISO pass-through.
If U.S. issuers decide to increase their focus on prepaid because of
Durbin 2.0, we estimate that could represent roughly a 2% to 4% EPS hit
for Green Dot. Any headwind faced by the Netspend side of the Total
System could be offset by modest benefits in their merchant acquiring
business.Founder and President of iConnect core barrel,
Subodh Gupta is very excited about the release, as it took them months
of testing. EBay's PayPal unit also benefited slightly from Durbin 1.0
from lower transaction expense on debit-card-funded accounts, and could
do so again if Durbin 2.A consortium of state-owned Russian banks would crimpedwire the system and collect processing fees "estimated at $4bn a year", the cable claims.0 b'es reality.
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