Amex shares see drop as credit card fees is being targeted
The stock of American Express Co., dropped the most on the Industrial Average of the Dow Jones after an announcement about cuts in debit card fees would be followed with cuts in credit card fees as well. The shares dropped 3.4%, by 1.51 dollars, which is the biggest drop over the last couple of months. This year, overall AmEx shares have gained 4.9%.
There were proposals last week from the Federal Reserve over swipe fee cuts, also known as interchange fees that are paid by merchants in order to accept debit cards. The cut was a whopping 84% which gives merchants a better opportunity to steer their customers away from paying the higher fees levied by AmEx cards. The proposals of the Fed were on the back of the Dodd Frank legislation for regulatory overhaul that was signed by the President. It calls for a reasonable adjustment of the interchange fees to keep the cost of debit transaction processing proportional.
Interchange on credit cards until now has escaped attention with an average of 2% on every transaction. This fee was supposed to be a compensation for banks that take the risk of credit lending. However, the same argument wasn`t valid for debit cards as the fee is deducted from the funds available in the checking accounts of the customers.
There was a drop in stock for Visa Inc. by 17% last week. Second placed MasterCard, in terms of payment network volume also saw a decline by 13% with new proposals on debit interchange, from the Fed.
Latest Credit Card Issuers News
An alliance between American Express and i2c is now focused on offering payment products in the American Express network through fintech companies. Amex announced its collaboration with payment and banking technology company i2c in April this year. The two partnered to create a platform that allows fintechs and financial institutions to launch cards more quickly […]
Continuing to live in the present reality and the ongoing COVID-19 pandemic, global giants of the financial and credit sector introduce new bonuses for the convenience of their customers. Mastercard, in turn, has announced new partnerships with DoorDash and HelloFresh offering new food and grocery delivery perks to Mastercard World and World Elite cardholders. According […]
Walgreens has recently announced its plans to enter the consumer financial services market. To be precise, the second-largest pharmacy store chain in the United States is going to start issuing credit cards and prepaid debit cards under its brand. The main reason for this expansion of the scope of activity is the losses incurred by […]
Very soon Apple fans will get an opportunity to purchase such devices as Mac, iPad, AirPods, the Apple Pencil, and more at a 0% interest payment plan. This weekend, Bloomberg shared the information that Apple Inc. was about to offer a 0% financial option on its Apple Card credit card by Goldman Sachs®. The new […]
In April, Mastercard conducted a global online survey aimed at studying changes in customer behavior during the COVID-19 outbreak. Now even going to the nearest supermarket for essentials may bode the risk of getting infected. Everyone seeks to be careful, observing hygiene measures to maintain health. Thus, it is natural that people’s buying habits have […]