Visa Inc. said it will explain next month why its business "remains solid" in the face of pending restrictions on debit card transaction fees.
Visa said Friday that it plans to file an update with the Securities and Exchange Commission on July 6 regarding the San Francisco payment network's financial outlook for fiscal 2011 in light of the new rules.
Visa executives also plan to hold a conference call that day to discuss the business impact of the rules set by the Federal Reserve Board, which was charged with establishing "reasonable and proportional" interchange fees for debit card transactions under an amendment to the Dodd-Frank Act.
The Fed in December proposed capping the fees at 12 cents per transaction compared with a current average of 44 cents. The reduction is expected to lower the revenue that banks earn from debit interchange by as much as $13 billion annually.
Intense efforts by banks and card networks like Visa to delay implementation of the caps and other debit card rules set to take effect July 21 have failed. However, industry experts say the Fed could increase the debit-fee cap when it releases its final rules on June 29.
Visa and other card networks set the interchange fees that are collected by the banks that issue cards carrying their brands. Though the networks do not profit from interchange, analysts say Visa and MasterCard Inc. stand to lose revenue if banks pressure them to lower their other rates.
Visa and its competitors could also be affected by another provision in the regulation that prohibits exclusive network routing deals with banks. Under two different proposals, banks would have to support other networks to give merchants more options to route transactions.
Some banks today are in exclusive relationships for transaction routing. Analysts say Visa, which owns the Interlink PIN debit network, would be affected most by the provision because it has more exclusive deals with banks.
Visa said it will continue to grow after the debit rules take effect.
"Our global network, strong client relationships, product and service offerings and global brand underpin our ongoing success," Visa said in a press release Friday. "As we have done throughout our history, we will continue to adapt our strategies to ensure our long-term success, including aggressive investments to grow our global presence and the introduction of innovative new products and services" for e-commerce and mobile payments.
