Major Banks In Talks To Exploit Debit Card Loophole
8 52JPMorgan, Bank of America, Wells Fargo, PNC, and other major banks have reportedly explored acquiring Fiserv's debit-card networks, STAR and Accel, in a move that could help them bypass federal caps on debit-card transaction fees. A law limits the fees big banks can charge merchants, but only if the transactions are routed through an outside network. There are no caps on these interchange fees over a bank-owned network, however. The Wall Street Journal reports: When Capital One Financial bought Discover Financial in a $50.6 billion deal, it got a network that cut out the need for a middleman in card transactions and allowed it to deal more directly with merchants. Now, big banks are looking on with envy because owning a network can mean exemption from a federal law that caps debit-card fees. Those fees collectively amount to billions of dollars each year across the industry, but banks have long complained the government-defined cap limits their ability to offer customers debit-card rewards and other services. Some have been exploring a small deal that could upend the rules, though they are worried about political backlash if they try.
Big banks including JPMorgan Chase, Bank of America, Wells Fargo and PNC Financial Services Group have in recent months held preliminary and tentative discussions about a deal to acquire a network owned by the financial-technology company Fiserv, according to people familiar with the matter. There is no certainty a deal will happen. Several of the banks that looked at the Fiserv network have already decided it would be unlikely for them to move forward, some of the people said. Some have privately expressed concern that such a deal could prompt backlash from lawmakers, regulators and merchants, the people added.
8 comments
debit card rewards (Score: 5, Funny)
by SirSlud ( 67381 ) on Tuesday July 07, 2026 @02:04PM (#66227040)
yeah, damnit, we can't charge you X so we can give X - some amount back to you and call it a reward
fucking reward schemes suck
Re:debit card rewards (Score: 5, Insightful)
by cruff ( 171569 ) on Tuesday July 07, 2026 @02:25PM (#66227074)
Yup, these rewards are really scammy. Just give me lower prices up front so I can buy what I want, not random reward crap.
I never use my debit card,... (Score: 5, Insightful)
by Anonymous Coward ( None ) on Tuesday July 07, 2026 @03:59PM (#66227266)
...and use a credit card instead. Why?
A debit card is a direct line to your bank account. If someone fraudulently steals money from my account, that's my problem.
A credit card is a buffer (with a limit) between a thief and my bank account. If someone compromises my credit card, that's the bank's problem.
Re:debit card rewards (Score: 5, Informative)
by hAckz0r ( 989977 ) on Tuesday July 07, 2026 @02:32PM (#66227082)
That "reward" comes from the money the merchant pays, and then they just raise the price of the product to compensate for their calculated loss. Rewards are not free magic money, you actually paid that money up front when you bought the product, and here the CC company is just giving you a mere fraction of that increase in price back to you, just to make you feel good. Are people really this stupid?
Re:debit card rewards (Score: 5, Insightful)
by Bill, Shooter of Bul ( 629286 ) on Tuesday July 07, 2026 @02:51PM (#66227102)
No, No no. Silly people who think they understand things. The money is charged to the merchant, yes thats true. However, you with a rewards card get charged the same price as Joe Schmoe who does not have a rewards card. You are paying less because you get the reward. Joe Schmoe is getting screwed. So get the rewards you can so you pay lower prices.
Time to establish a cap for in-network. (Score: 5, Informative)
by Ecuador ( 740021 ) on Tuesday July 07, 2026 @02:14PM (#66227058)
It really does not make sense to have a cap only for out-of-network, when in-network arguably are less cost for the institutions. But of course banks are spending a lot of money on both parties so...
Re:Time to establish a cap for in-network. (Score: 5, Interesting)
by Coopjust ( 872796 ) on Tuesday July 07, 2026 @04:15PM (#66227296)
The in-network exemptions (issuer-is-network) were exclusively carved out for Senator Durbin, as Discover Financial Services (a part of Cap1) is an Illinois company that employs 6,000+ people in the state. Discover getting a debit interchange carveout made them more competitive.
The problem is now that it exists, other large banks are looking at a swipe fee advantage now that Cap1 acquired Discover and that Dick Durbin is now on the verge of retirement unlikely to buck his prior law, the other large banks are realizing under the current administration, such a move of a megabank acquiring major debit networks is likely to escape unscathed from regulators...
At What Point Does It Rise To Collusion? (Score: 5, Interesting)
by SlashbotAgent ( 6477336 ) on Tuesday July 07, 2026 @03:33PM (#66227216)
JPMorgan, Bank of America, Wells Fargo, PNC... reportedly explored acquiring Fiserv's debit-card networks, STAR and Accel, in a move that could help them bypass federal caps on debit-card transaction fees.
So at what point does this rise to the definition of collusion? This seems to fit my understanding of the definition.