Barclays on U.S. IT Consulting & Computer Services: Push Towards Credit Cards Begins

Barclays on U.S. IT Consulting & Computer Services: Push Towards Credit Cards Begins

Barclays analyst says, "In anticipation of a lower debit interchange rate being implemented this October, we are beginning to see a number of banks explore new and somewhat innovative solutions to maintain (and in some instances replace) revenues currently derived from debit card usage. For example, most banks have already announced initiatives to reduce and/or eliminate rewards programs for debit cards, as well as intentions to institute minimum monthly balance thresholds. Some banks, including Wells Fargo (NYSE: WFC), SunTrust (NYSE: STI) and Regions Bank (NYSE: RF), have taken it a step further, recently announcing monthly usage fees for customers making purchases with debit cards..."

"...While we remain in the early stages around what final actions issuing banks may take to offset revenues lost from lower interchange fees on debit card fees, and note that merchant and consumer reactions warrant further watching, we believe these efforts could potentially have positive ramifications for a number of names in our coverage universe, including MasterCard (NYSE: MA), Visa (NYSE: V), Total System Services (NYSE: TSS) and Global Payments (NYSE: GPN)."

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