The Threat From Europe for Visa, MasterCard and the Banks

A decision by Europe's highest court could have big implications for the U.S. business of banks and credit card companies. Craig Wildfang, partner at Robins, Kaplan, Miller & Ciresi, explains why Visa, MasterCard and big banks like Citigroup, Bank of America and JPMorgan could see their U.S. fee business threatened. They have argued if the interchange fees on credit card transactions were lowered it would make it impossible for them to profit. That argument has successfully protected the interchange fees in the U.S. for credit cards, even as debit card fees were lowered as a result of the so-called Durbin Amendment, part of the 2010 Dodd Frank bill. But if they can profit despite the lower fees in Europe, it will become easier for policymakers or plaintiffs to push for lower credit card fees in the U.S.