UBS Napa Recap "Regulatory Panel" Chiodo

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UBS Napa Recap "Regulatory Panel" Chiodo

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payment rails (e.g., real-time bank transfers, digital wallets, and domestic schemes). Ella Zimmermann

While each individual threat varies in its likelihood, timing, and ultimate economic Associate Analyst

impact, and in many cases may prove overstated, the breadth of risks under ella.zimmermann@ubs.com

+1-212-713 5000consideration today may underscore a more complex and evolving backdrop relative to

prior cycles. We provide additional thoughts on emerging risks to the card networks in Holt Bashinsky

our recent report: An alternative look at the net revenue growth algorithm. Associate Analyst

holt.bashinsky@ubs.com

+1-212-713 2833

Credit Card Competition Act (CCCA): Our panelists suggested that while passage of

Siddhanth Sonithe CCCA would be highly disruptive to the current card ecosystem and for Visa &

Associate Analyst

Mastercard economics, the probability of enactment remains low in the near-term given

siddhanth.soni@ubs.com

the lack of a clear legislative vehicle, limited bipartisan sponsorship, and absence of a +1-212-649 8010

strong House champion. The panelists noted Senator Welch (VT) would potentially

become the new leader of the CCCA when Senator Durbin leaves office, but the act still

lacks a clear bipartisan counterpart, an element likely necessary for the act to gain

traction without a clear market impetus (e.g., bad bank behavior). Additionally, our

guests highlighted that MDL-1720 could alleviate some regulatory pressure related to

CCCA, with MDL-1720 providing relief to merchants' cost of acceptance with a limited

impact to Visa & Mastercard in our view (see additional thoughts here). Further, certain

panelists viewed the prospect of reduced consumer rewards (a more theoretical point in