Visa Network Participation Fee
Update: Visa has scrapped what it was calling the Network Participation Fee in place of the Fixed Acquirer Network Fee due to become effective on April 1, 2012.
We're leaving this article here for historical reference, but will not be updating it. New information about the Fixed Acquirer Network Fee (FANF) can be found at the post linked above.
Visa has announced a new Network Participation Fee and pricing structure in response to the Durbin Amendment which allows merchants to choose through which network to route their debit card transactions.
Though details are sparse at the moment, Visa is planning a lower, more aggressive pricing for structure for debit card transactions that will allow the company to compete with PIN debit networks that stand to grab market share once the Durbin rules go into effect.
Visa is planning to lower its variable debit interchange rate in October, and charge a fixed Network Participation Fee. Early speculation is that Visa's new Network Participation Fee will be an incentive-based fee — moving lower as a merchant routes more debit transactions through Visa's network.
In Visa's latest quarterly earnings conference, Chairman Joseph W. Saunders said, "We expect the lower fees to help us win debit routing volume and to effectively compete on the issuing side of the business."
Exact details of fees aren't currently available, but we will update this post as Visa releases clearer, more specific details about their new pricing structure and Network Participation Fee for debit card transactions.
MasterCard announced that it plans to take a different route than Visa in response to the Durbin debit changes. Instead of imposing an incentive-based fee, MasterCard brass has said the company will work with issuers and acquirers closely to maintain debit transaction volume.
Here are some good articles on the topic:
MasterCard Will Sweet-Talk Debit Issuers One by One
Visa Outlines New Fee Structure To Defend Its Debit Business