Visa Inc. said it plans to introduce a dual interchange schedule for issuing banks and credit unions in the wake of debit interchange regulation.
Analysts say the move would give community banks and credit unions an advantage over larger institutions. Last month, the Federal Reserve Board published its proposal to restrict interchange fees on debit cards to about 12 cents per transaction for institutions with $10 billion or more in assets. Smaller companies would not be restricted.
"We will support a two-tiered debit interchange structure," a Visa spokesman said in an e-mailed statement Friday. "We expect to have a separate rate schedule for exempted institutions and products at the time of implementation" of the Fed's rule.
Though Visa is not required to create a two-tiered rate structure, it is "saying they are going to play ball," said Howard Polack, a senior analyst at Aite Group LLC, but "it's just not going to be fair."
The proposal could require bigger retail banks to raise fees and curtail incentives, analysts said, but smaller institutions would not have to. Already, some retail banking companies are ending free checking, and analysts predict some will go a step further by adding charges to debit cards.
Visa's move "makes total sense," said Eric Grover, the principal of the payments consulting firm Intrepid Ventures in Menlo Park, Calif.
Initially, Visa executives said a dual schedule was impossible, Grover said. "That was simply intended to scare credit unions and small banks to keep them lobbying."
The move could also make branding sense for Visa, Grover said. Companies with less than $10 billion in assets would be more likely to push the Visa brand ahead of their own, and larger banks sometimes play down the Visa logo in lieu of their own.
Still, the move could isolate the payment network's larger issuers.
"Why would they" create a dual rate schedule "if the big banks are increasing fees to consumers?" said Jason Kupferberg, an analyst who follows Visa and MasterCard for UBS Securities LLC in New York. "I think Visa has come out and told these folks that, at least initially, they are not going to level the playing field."
MasterCard Inc. issued a statement Friday saying that it is still evaluating its options.
"We believe it is not prudent to make such a decision in advance of knowing all the facts," a MasterCard spokesman said in an e-mail. The card network is "committed to maintaining a competitive interchange structure that appropriately balances the payments ecosystem," he wrote.
Visa did not say when it expects to impose the new rate schedule. The Fed's rules are expected to take effect July 21.
