Visa Inc. (V) and MasterCard (MA) shares advanced Monday after U.S. politicians reached an agreement on the Durbin bill limiting interchange fees on debit card transactions.
Interchange fees, or “swipe” fees, are charged by credit card companies in order to cover the cost of processing a credit or debit card transaction which usually get assessed based on a percentage of the total transaction, often from 1-3% (or more) of the total purchase.
Card networks like Visa and MasterCard saw their stock rise as the new deal scales back the limits on fees they would have faced under legislation that passed the Senate in May.
“We were able to reach an agreement which makes minor changes to strengthen consumer protections and bring competition to a market where there is none,” Assistant Senate Majority Leader Dick Durban said in a statement.
Visa shares gained 4.58% to $80.57 while MasterCard rose 3.90% to $222.62 in afternoon action Monday.