Visa Q3 2010 Earnings Call Transcript — Seeking Alpha

July 29, 2010

The next question comes from David Hochstim, Buckingham Research Group.

David Hochstim – Buckingham Research Group, Inc.

Yes, I wondered could you give us a sense of how much customer account conversions might have contributed to the debit growth in the U.S. and processed transactions, are they meaningful? Senator Durbin’s got some new credit card interchange proposal relating to government cards. I wonder if you have any color on that.

Byron Pollitt

On the first part, the conversions did contribute, but very, very, modestly, not material. And on the second part of the question…

Joseph Saunders

As it relates to the proposals that Durbin just made, it would have very little effect on interchange in total. I mean, it’s de minimis.

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VISA INC Dancing Around the Facts… Visa Q3 2010 Earnings Call Transcript — Seeking Alpha #SwipeFees

July 29, 2010

James Kissane – BofA Merrill Lynch

Joe, can you give us a little more color on the DoJ situation? I mean that came across pretty complex, I know it’s legalese. But is it a surcharge issue, a credit interchange issue, or just maybe big picture color?

Joseph Saunders

There is not an interchange issue with the DOJ. The primary issue is their concern over surcharging, and it relates to credit cards. This is a dialogue that we’ve had with them for a lengthy period of time. The current conversations are dovetailing with the litigation conversation. So we’re in the midst of — so I think this is just part of the same fabric, and I think that things are moving in a direction that we have anticipated and so we’re not unhappy with where we are.

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Visa Q3 2010 Earnings Call Transcript — Seeking Alpha #SwipeFees

July 29, 2010

Although the outcome is uncertain at this time, we are currently engaged in constructive negotiations with the department to resolve its concerns as it relates to Visa without litigation or payment of monetary damages and in a way that proactively addresses concerns in the covered litigation.

Regarding the covered litigation, it is proceeding on its normal course, and we continue to be actively involved in settlement discussions. As a reminder, this litigation is covered by our U.S. financial institutions under our Retrospective Responsibility Plan.

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Visa Q3 2010 Earnings Call Transcript — Via Seeking Alpha #SwipeFees

July 29, 2010

We have been cooperating with the department to satisfy the civil investigative demand filed within late October 2008 concerning the major payment networks, rules on surcharging and merchant steering as previously reported, and in recent months, have met with the department on numerous occasions. The department has indicated that it is considering filing a civil lawsuit challenging rules prohibiting surcharging on credit and differential discount in between networks, similar to the claims that have been included within the merchant interchange litigation that’s been pending since 2005.

READING  ARTICLE via Visa Q3 2010 Earnings Call Transcript — Seeking Alpha.


Visa Says Justice Department Is Considering Antitrust Lawsuit – BusinessWeek

July 29, 2010

The Justice Department’s antitrust division is “investigating whether certain credit-card network rules regarding merchants’ treatment of various payment forms, including credit cards, are anticompetitive,” spokeswoman Gina Talamona said in an e-mail. She declined to discuss specific companies.

READ ARTICLE via Visa Says Justice Department Is Considering Antitrust Lawsuit – BusinessWeek.


Wells Fargo’s Chief Says New Rules Mean New Costs for Customers – BusinessWeek

July 29, 2010

July 29 (Bloomberg) — Wells Fargo & Co. Chief Executive Officer John Stumpf said customers, not just the bank, will bear the financial burden for U.S. regulations that cover services ranging from home loans to credit cards. “I can’t guarantee that we won’t pass on some of those costs,” Stumpf, 56, said in an interview at his San Francisco office. “We’ll try to tighten our belt and absorb some of the costs of compliance, but some costs may change and customers might pay for their financial services in new ways.”

READ ARTICLE via Wells Fargo’s Chief Says New Rules Mean New Costs for Customers – BusinessWeek.


Part II | New Assault Launched On Card Interchange – Credit Union Journal Daily Briefing Article

July 29, 2010

Recent studies show that consumers paid more than $62 billion in interchange fees on cards last year, more than $50 billion of it going through the two networks. Credit unions are believed to have earned about a tenth of those fees, some $6 billion. The latest Durbin amendment must now be approved by the full Senate Appropriations Committee, which is scheduled to take up the subcommittee’s bill tomorrow, then by the full Senate. It would also have to be approved by the House, which has not yet taken it up. “There’s still a lot of steps to this,” NAFCU’s Thaler told Credit Union Journal yesterday

READ ARTICLE via New Assault Launched On Card Interchange – Credit Union Journal Daily Briefing Article.